CFTC v. Lake Shore Asset Management Ltd. (Criminal Contempt Referral)

2007 WL 4591005 (N.D. IL December 21, 2007)

In Commodity Futures Trading Com’n v. Lake Shore Asset Management Ltd., 2007 WL 4591005 (N.D. IL December 21, 2007) the Court ruled that a defendant corporation and its president must show cause why they should not be referred to the United States Attorney for investigation and possible prosecution of criminal contempt under Fed.R.Crim.P. 42 after refusing to comply with a previous civil contempt order imposing various sanctions for failure to turn over documents to the Receiver as required in the preliminary injunction and the order appointing the receiver. The civil contempt sanctions included inter alia a $25,000/day fine and payment of costs to the government and the Receiver. (See Commodity Futures Trading Com’n v. Lake Shore Asset Management Ltd., 2007 WL 4365365 (N.D.IL December 10, 2007 in reference to the civil contempt proceedings). Notably, the Court’s action came after eleven days of non-response from the defendants. The Court noted that, while criminal contempt is an extraordinary measure, it believed the action was necessary to avoid additional delay and to force compliance with the Court’s order. Lake Shore Asset Management Ltd., 2007 WL 4591005 **3.

– Phillip S. Stenger