Contact

Click here for a confidential contact or call:

1-212-350-2764

Fraud in CFTC-Regulated Markets

This archive displays posts tagged as relevant to fraud in markets regulated by the Commodity Futures Trading Commission, the CFTC, or governed by the Commodity Exchange Act, the CEA. You may also be interested in the following pages:

Page 1 of 28

March 18, 2019

Royal Metals Group, LLC, and part owner, Chelsea Gless have been ordered by the U.S. District Court for the Southern District of New York to pay over $2.3 million for fraudulent misrepresentations and misappropriation of customer funds in a precious metals scheme.  The order requires the defendants to pay restitution of $584,549.84 to defrauded customers and a $1,753,647 civil monetary penalty. The defendants are also permanently banned from trading regulated commodities and registering with the CFTC. CFTC    

March 11, 2019

Marshall Islands-based 1pool Ltd. and its chief executive officer and owner, Patrick Brunner, will pay $990,000 to resolve a CFTC action alleging that they illegally offered retail commodity transactions that were margined in bitcoin, failed to register as a futures commission merchant (FCM), and failed to have required anti-money laundering procedures in place. The settlement payment consists of a $175,000 civil monetary penalty, disgorgement of $246,000 in gains, and restitution of approximately $570,000 to U.S. customers.  CFTC

February 21, 2019

Precious metals dealer Hannes Tulving, Jr. and The Tulving Company, Inc., have been ordered to pay a civil monetary penalty of $15.7 million, having been charged with fraudulent solicitation and misappropriation in 2015.  Between 2013 and 201, defendants fraudulently held themselves out as a reputable dealer in gold, silver, platinum, and palladium bullion and coins, soliciting more than $150 million in funds from 381 people.  Tulving then misappropriated funds for unauthorized uses and failed to purchase or deliver the metals to customers.  In 2016, Tulving was sentenced to 30 months in prison.  CFTC

January 28, 2019

Jiongsheng (“Jim”) Zhao, of Sydney, Australia, a commodities trader at an Australian proprietary trading firm (Trading Firm A), pleaded guilty to spoofing in connection with his fraudulent and deceptive trading activity in the E-mini S&P 500 futures contracts market on the Chicago Mercantile Exchange (CME). Zhao admitted that from approximately July 2012 through March 2016, he placed thousands of orders for E-mini S&P 500 futures contracts on the CME that he intended to cancel before execution to artificially move the price of E-mini S&P 500 futures contracts in a direction that was favorable to Zhao to the detriment of other market participants. Trading Firm A kept a percentage of Zhao’s trading profits, ranging at various times from 20 percent to 50 percent. DOJ

Top Ten SEC and CFTC Recoveries of 2018

Posted  01/18/19
Business man in suit pointing finger at "Top 10" heading
The SEC and CFTC were busy in 2018. In addition to its robust FCPA enforcement, the SEC recovered hundreds of millions of dollars from companies accused of defrauding investors, breaching fiduciary duties, and violating SEC rules. The SEC also awarded its largest-ever whistleblower awards in 2018. Likewise, the CFTC spent the last year cracking down on market manipulators, rooting out commodities fraud, and halting...

December 21, 2018

Lon Olen Friedrichsen of Alton, Iowa, has been ordered to pay $2.1 million following a CFTC complaint alleging that he improperly solicited customers to obtain access to their futures trading accounts by misrepresenting his registration and experience.  Friedrichsen then ran up substantial losses in the customer accounts, but created false statements to conceal those losses.  CFTC

December 21, 2018

Forex trading firm Wright Time Capital Group LLC and its principal, Michael S. Wright, have been ordered to pay approximately $1.6 million in connection with a CFTC complaint charging that they fraudulently solicited investments in a commodity pool for foreign exchange trading, misrepresented that pool participants’ funds would be used to engaged in forex trading, misappropriated pool participants’ funds, and created false records that misrepresented trading returns and account values. CFTC

December 21, 2018

Newport Private Capital LLC and its principal, Jonathan Hansen, have been ordered to pay a $315,000 penalty for a "cherry-picking" scheme by which NPC entered multiple orders for commodity interests, but only allocated the orders to specific customer accounts after they were executed.  The defendants then preferentially allocated the transactions that turned out to be profitable to accounts in the name of Hansen's spouse, and not to the accounts of other NPC customers.  CFTC

December 19, 2018

Following charges brought by the CFTC in 2016, Haena Park and companies affiliated with her, Phaetra Capital GP LLC, Phaetra Capital Management LP, and Argenta Group LLC, have been ordered to pay $23 million in restitution to defrauded investors in commodity pools operated by defendants.  Park made material misrepresentations and omissions concerning her trading expertise, and the defendants made and issued false documents to conceal their trading losses and misappropriations of investor funds, in addition to commingling funds and failing to operate the commodity pool as a separate legal entity.  CFTC

November 16, 2018

The CFTC and State of Utah have charged Rust Rare Coin, Inc. (RRC) and owner Gaylen Dean Rust for their roles in a precious metals Ponzi scheme. According to the DOJ press release, beginning in 2008 until only just recently, Rust fraudulently obtained over $170 million for RRC by lying to at least 200 investors in at least 17 states to get them to invest money in a silver pool. Investors were told the company's silver holdings amounted to between $77 to $80 million, and they stood to gain between 20-40% profit each year as a result of RRC’s buying and selling strategy. In reality, however, the defendants did not have nearly as much silver and were using investor contributions to pay other investors, as well as personal expenses. CFTC, UT AG
1 2 3 28

Newsletter

Subscribe to receive email updates from the Constantine Cannon blogs

Sign up for: