CFTC Escalates Enforcement Actions Against Commodity Pool Fraud

CFTC Escalates Enforcement Actions Against Commodity Pool Fraud

The U.S. Commodity Futures Trading Commission (CFTC) announced yesterday that Judge G. Ross Anderson of the U.S. District Court for the District of South Carolina entered an emergency Order freezing and preserving the remaining pool of participant assets under the control of Robert Stanley Harrison, of Easley South Carolina.

Soliciting Funds

According to a CFTC press release, Harrison was charged with fraudulently soliciting funds from members of the public to invest in the Investors Choice Advisors LLC commodity pool. The charge was brought against Harrison in a civil enforcement Complaint filed under seal by the CFTC on February 6, 2013. The record of solicitation dates back to at least June 2011 to the present.

The CFTC’s Complaint states that Harrison guaranteed pool participants’ principal investment against risk of loss, in addition to promising 100 percent profits of investments within 60 to 90 days. The Complaint also claims that Harrison and his agent issued false investment contracts to participants that represented the assumed profits. Harrison also misappropriated pool participant funds, improperly operated the commodity pool, and failed to register himself and his agent as a Commodity Pool Operator with an Associated Person of the CFTC.

According to the press release, the CFTC seeks a permanent injunction from future violations of federal commodities laws, permanent registration and trading bans, restitution to defrauded pool participants, disgorgement of ill-gotten gains, and civil monetary penalties.

CFTC Charges Hansen with $1.1 Million Commodity Pool Fraud

A federal court in Texas has ordered J. Hansen Investments, LLC, to pay more than $1.3 million to settle a case of commodity pool fraud. From the statement:

The Order finds that Hansen fraudulently solicited and accepted over $1.1 million from investors to trade E-Mini S&P 500 futures contracts in a commodity pool Hansen operated. Hansen used only a small portion of pool participants’ funds to trade futures contracts, transferring such funds to his personal or JHI’s futures trading accounts, both of which sustained consistent losses, according to the Order. The Order also finds that Hansen misappropriated funds for his personal use and commingled pool funds with his own funds. Additionally, Hansen issued monthly account statements to pool participants falsely reporting profits earned in pool participants’ trading accounts and monthly trading memoranda falsely reporting monthly and annual trading returns, according to the Order.

Read more.

 

 

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About The Author


Felix Shipkevich

Felix Shipkevich

Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.

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