The U.S. Commodity Futures Trading Commission (CFTC) announced today that a Federal Court in Nevada has ordered Trans Global Investments, LLC to pay $340,000 to settle commodity pool fraud charges.
The defendants, including Charles Leroy Timberlake, Trans Global’s President, are now permanently barred from the commodities industry.
As to Timberlake and Trans Global, the CFTC complaint alleged that Timberlake fraudulently solicited at least $220,000 from five individuals for the purpose of trading commodity futures and option contracts through the Trans Global pool. The complaint further alleged that Timberlake falsely represented that he was registered with the CFTC as a CPO when, in fact, he has never been registered with the CFTC in any capacity. Finally, the complaint also alleged that Timberlake made false representations of material facts and issued false statements to Trans Global pool participants regarding the profitability and value of their investments.
According to the CFTC, litigation continues for the remaining defendants.
Although the New York Times and others have recently speculated on the nature of 2013’s coming white-collar crimes, the best indicator of what to expect for enforcement in 2013 is actually the final quarter of 2012.
If the final quarter of 2012 is any indication, the CFTC will continue to pursue commodity pool scams, failed registration, and rate-rigging enforcement in 2013. This new penalty against Trans Global Investments and Charles Leroy Timberlake—not to mention pending litigation against related persons—suggest that the agency’s aggressive stance on commodity pool scams may persist in the New Year.
Nevertheless, the pace of enforcement seems to have slowed since a major regulatory blitz in November and early December. Given that the long-term goal of the CFTC must be to curtail commodity pool scams, does this suggest that the CFTC’s diligence is paying off?