Post by E Campbell on Sept 21, 2010 1:14:22 GMT 4
GM's Former Aluminum Trader Banned for $5.6 Million Futures, Options Fraud
Sep 20, 2010
A former General Motors Co. metals manager was banned from trading commodities after bilking the automaker of $6.5 million through unauthorized aluminum transactions, according to U.S. regulators.
Daniel J. Bealko, the former global commodity manager for lightweight metals at Detroit-based GM, pleaded guilty to one count of wire fraud and one count of income-tax evasion on Nov. 5, the U.S. Commodity Futures Trading Commission said today in an e-mailed statement.
Bealko, who devised and implemented GM’s aluminum-hedging strategies between 1996 and 2003, used the commodity markets to defraud GM by “knowingly engaging in unauthorized futures and options trading” from June 2003 to Dec. 7, 2003, the agency said.
Without GM’s knowledge or consent, Bealko “sold New York Mercantile Exchange aluminum-futures contracts and options on NYMEX aluminum-futures contracts to personally profit from GM’s divesture of surplus aluminum,” the CFTC said. The transactions resulted in a gain of about $6.5 million, according to the agency.
Bealko, formerly of Clarkston, Michigan, is currently in federal custody after he was sentenced to 70 months in prison and ordered to pay full restitution to GM, the CFTC said. He was banned permanently from trading, according to a commission order that was entered today.
GM declined comment, spokesman Tom Wilkinson said in an e- mail today.
Elizabeth Campbell: ecampbell14@bloomberg.net
Sep 20, 2010
A former General Motors Co. metals manager was banned from trading commodities after bilking the automaker of $6.5 million through unauthorized aluminum transactions, according to U.S. regulators.
Daniel J. Bealko, the former global commodity manager for lightweight metals at Detroit-based GM, pleaded guilty to one count of wire fraud and one count of income-tax evasion on Nov. 5, the U.S. Commodity Futures Trading Commission said today in an e-mailed statement.
Bealko, who devised and implemented GM’s aluminum-hedging strategies between 1996 and 2003, used the commodity markets to defraud GM by “knowingly engaging in unauthorized futures and options trading” from June 2003 to Dec. 7, 2003, the agency said.
Without GM’s knowledge or consent, Bealko “sold New York Mercantile Exchange aluminum-futures contracts and options on NYMEX aluminum-futures contracts to personally profit from GM’s divesture of surplus aluminum,” the CFTC said. The transactions resulted in a gain of about $6.5 million, according to the agency.
Bealko, formerly of Clarkston, Michigan, is currently in federal custody after he was sentenced to 70 months in prison and ordered to pay full restitution to GM, the CFTC said. He was banned permanently from trading, according to a commission order that was entered today.
GM declined comment, spokesman Tom Wilkinson said in an e- mail today.
Elizabeth Campbell: ecampbell14@bloomberg.net