FOR IMMEDIATE RELEASE
Jan 3 2012
Contact: Ryan Hobart, (573) 526-0949
Carnahan Halts Unregistered Commodities Trading Operation in Lee’s Summit
According to the cease-and-desist order issued by officials in Carnahan’s Securities Division, Gumerman, who was not registered to offer or sell securities in Missouri, sold investments in a commodities trading fund through his business, Gumerman Trading Company (GTC), since 1990, leaving investors with more than $700,000 in losses. The Securities Division received nine investor complaints concerning Gumerman in November 2011.
According to the order, Gumerman guaranteed investors that they would not lose money and they could withdraw the funds they invested at any time.
“Before trusting someone with their savings, Missourians should check out the legitimacy of both the investment and the person offering it,” Carnahan said. “One phone call to the Securities Division could potentially protect a lifetime’s worth of savings.”
The order states that Gumerman failed to disclose to investors that he had only traded commodities for one year in a personal account and lost money in that account. He also allegedly failed to tell investors that he “borrowed” several hundred thousand dollars from the GTC bank account for personal expenses. Specifically, it is alleged that Gumerman paid approximately $10,000 to three waitresses at a Hooters restaurant and one clerk at another retail store that included payments for the purchase of a car, furniture and clothing. Gumerman also allegedly used investor funds to pay expenses for his engineering business and rent for an apartment.
The order alleges that at least 12 investors in Missouri and Pennsylvania invested more than $948,000. At least $724,000 has not been repaid. One investor is currently 91 years old. The cease-and-desist order alleges that Gumerman sold unregistered securities and committed securities fraud by failing to disclose to investors how their funds would be spent.
Gumerman faces up to $75,000 in penalties and costs and restitution of over $700,000. Gumerman has 30 days to request a hearing. The Securities Division is cooperating with other governmental agencies regarding this matter.
For more information regarding investments and fraud protection, or for information regarding a company or representative, visit the secretary of state’s online Investor Protection Center at www.MissouriInvestorProtection.gov or call the toll-free Investor Protection Hotline at 1-800-721-7996.
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