Fraud in CFTC-Regulated Markets

May 3, 2017

The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action in the U.S. District Court for the District of Arizona against Cory Williams of Gilbert, Arizona, and his company, Williams Advisory Group (WAG) (collectively, Defendants), charging them with defrauding 40 investors out of at least $13 million in connection with a commodity pool they operated. The CFTC Complaint charges Defendants Williams and WAG with commodity futures fraud and Williams with commodity pool fraud and failure to register as a commodity pool operator. The Complaint also charges Williams with engaging in activities prohibited for a commodity pool operator, including commingling pool participant funds with Williams’ personal funds. The Complaint alleges that Williams’ victims included family members, friends, neighbors and members of his church and other related churches in and around Phoenix, Arizona. CFTC

May 2, 2017

The U.S. Commodity Futures Trading Commission (CFTC) filed an enforcement action in the U.S. District Court, Northern District of Illinois, charging Defendant, William H. Powderly IV (Powderly) of New Hope, Pennsylvania, with fraudulently soliciting at least $825,000 from at least four customers for purposes of trading commodity futures on their behalf in an account in Powderly’s name. The Complaint also charges Powderly with making and providing false and misleading account statements to his customers. In particular, the Complaint alleges that from at least January 2016 through October 2016, Powderly solicited customers and prospective customers by claiming that he and a university professor had developed a commodity futures trading program that generated exceptional hypothetical trading results and that “beta” testing of this system generated consistent gains without a single day of loss. The Complaint further alleges that when soliciting customers and prospective customers, Powderly failed to tell them that the actual commodity trading he conducted for his commodity account during that 10-month period was consistently unprofitable, sustaining losses every month during that time. Additionally, the Complaint alleges that Powderly created false account statements for his trading account and sent them to his customers in order to conceal his trading losses. CFTC

April 20, 2017

The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action in the U.S. District Court for the Central District of California, Eastern Division, against Capitol Equity FX LLC (Capitol Equity), a purported hedge fund operating in California, and its principals and agents, Robert Leland Johnson IV and Marisa Elena Johnson, both of Chino, California (collectively, Defendants). The CFTC Complaint, filed on April 19, 2017, charges Defendants with commodity futures fraud; off-exchange, leveraged or margined retail foreign currency (forex) fraud; commodity pool fraud; and failure to register with the CFTC, as required. The Complaint also charges Capitol Equity with engaging in activities prohibited for a commodity pool operator, including commingling customer funds with Defendants’ personal funds. CFTC

April 6, 2017

The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge James I. Cohn of the U.S. District Court for the Southern District of Florida entered final default judgments against Relief Defendants Westward International Ltd. (Westward) and Coucarin Holdings Ltd. (Coucarin), both of Deerfield Beach, Florida. The Default Judgment Orders, both entered on March 23, 2017, require Westward and Coucarin to disgorge ill-gotten client funds in the amounts of $211,160 and $1,565,480, respectively. CFTC

March 30, 2017

Stephen Gola and Jonathan Brims were ordered to pay $350,000 and $200,000 respectively for spoofing in U.S. Treasury Futures Markets. The CFTC Order found that between July 2011 and December 2012, Gola and Brims engaged in spoofing more than 1,000 times in various Chicago Mercantile Exchange U.S. Treasury futures markets. The spoofing was done by placing orders in a futures market after a smaller bid was placed on the opposite side of the same or correlated futures or cash market. CFTC

March 27, 2017

Davisco Foods International, Inc. was ordered to pay a $150,000 penalty for acting as a futures commission merchant without registering with the CFTC. The CFTC Order found that between May 2011 and October 2014, Davisco accepted orders from its milk suppliers for the purchase and sale of CME Class III Milk futures contracts and executed those orders on behalf of the suppliers in its own trading accounts. CFTC

March 21, 2017

Neil Pecker and his company Vision Financial Partners, LLC were ordered to pay more than $6.5 million in restitution and civil monetary penalties for fraudulent solicitation and misappropriation in connection with off-exchange binary options. The order was issued by Judge James I. Cohn of the U.S. District Court for the Southern District of Florida. Pecker and Vision Financial Partners were found to have fraudulently solicited approximately $3 million from members of the public to trade off-exchange binary options. CFTC

February 14, 2017

Carlos Javier Ramirez and his companies, Gold Chasers, Inc. and Royal Leisure International, Inc. were charged with misappropriation, fraudulent sales solicitation, and issuing false statements in fraud schemes involving gold. According to the CFTC Complaint, between February 2012 through at least January 2016, the defendants allegedly fraudulently offered contracts to sell gold to at least 20 customers. This resulted in defendants allegedly fraudulently obtained at least $4.1 million. CFTC

February 9, 2017

John B. Oden and his company Oden Capital Management, LCC were ordered to pay a $100,000 penalty for failing to comply with pool operator requirements. The CFTC Order found that between April and June 2014, Oden acted as a commodity pool operator (“CPO”) without properly registering with the CFTC. Additionally, Oden and his company failed to properly operative their respective pools in accordance with regulatory requirements. CFTC

February 6, 2017

Forex Capital Markets, LLC, its parent company FXCM Holdings, LLC and its two founding partners Dror (“Drew”) Niv and William Ahdout were ordered to pay a $7 million penalty for defrauding retail forex customers. The CFTC Order found that between 2009 and at least 2014, the companies engaged in false and misleading solicitations of retain forex customers by concealing relationships with important market makers and misrepresenting conflicts of interest. CFTC