The Idaho Department of Finance has sued a Coeur d’Alene man for promoting a commodities trading scheme that cost investors $1.3 million.
Keith E. Mitchell, according to a complaint filed in Kootenai County District Court, did not tell investors the department had ordered him to stop violating security laws in 2003, when a $25,000 civil penalty was imposed. Nor did Mitchell tell them he is not licensed by the Commodities Futures Trading Commission.
Starting in 2007, Mitchell promised investors returns as high as 60 percent on commodity futures options. They would lose no more than 5 percent of their principal, he said.
The investors – at least seven – opened trading accounts with Mitchell’s brother-in-law, Keith Yrjana, who was doing business as Options Trading Co. Yrjana and the company were licensed.
Trades were executed through another firm according to written directions from Mitchell, who received 20 percent of any profits. The investors paid $90,640 to Mitchell, who received another $187,360 from Yrjana as a split of his commissions.
But when stock market activity turned in a way incompatible with Mitchell’s system in 2008, the complaint says, investors lost all, or nearly all, their money.
The suit, which includes four counts of fraud and unlawful commodity activities, seeks $1.3 million in restitution, $100,000 in fines and an injunction barring Mitchell from further securities trading or advising.