Stephanie Ostrowski Oct. 31, 2012, 2:22pm

WASHINGTON (Legal Newsline) - A default judgment and permanent injunction against Nicholas Cosmo was entered Thursday in an action brought by the U.S. Commodity Futures Trading Commission.

Announced by U.S. District Judge Leonard Wexler, Cosmo, formerly of Lake Grove, N.Y., was charged with defrauding investors out of tens of millions of dollars in a commodity futures trading scheme.

From at least January 2004 through December 2008, Cosmo allegedly solicited investors to invest in bridge loans and merchant advances. In reality, Cosmo used the solicited funds for unauthorized commodity futures trading that resulted in tens of millions of dollars in trading losses which Cosmo never disclosed to investors, the order finds.

As a result, the CFTC requires Cosmo to pay $240 million in civil monetary penalty and a permanent trading and registration ban is imposed. Cosmo is permanently barred from engaging in any commodity-related activity, including trading. Cosmo also cannot register or seek exemptions from CFTC registration.

In a related criminal case Judge Denis R. Hurley sentenced Cosmo to 300 months in prison and is ordered to pay restitution to investors in the amount of $179,195,232.63.

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