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Felix Shipkevich July 3, 2011

The CFTC has charged Grace Elizabeth Reisinger and ROF Consulting with operating a fraudulent commodity pool scheme. The Nebraska resident and her firm operated commodity pool NCCN, LLC, where they bought and sold exchange traded commodity futures and options (“ETFs”) and other financial instruments,  though they were never registered as Commodity Pool Operators (“CPO”) with the CFTC or NFA.

The CFTC claims that between February 28, 2005, and October 26, 2009, that Reisinger and ROF fraudulently solicited and accepted at least $4 million in commodity pool funds from the general public. Reisinger told prospective investors that she was exempt from CPO registration, that the commodity pool only took funds from investors who met the requirements for a qualified eligible person (“QEP”), and that the that minimum investment was $5 million. Furthermore, the defendants failed to send participants monthly account statements and annual reports or notify participants that their fees were paid to a “foreign introducing broker.”

According to the complaint, after the commodity pool was created and Reisinger was already acting as NCCN’s CPO, she filed a letter with the NFA claiming exemption from CPO registration under CFTC regulation 4.13(a)(4). This exemption relieves from registration those operators of commodity pools with only QEPs.  However, Reisinger admitted she “did not know” whether all participants were QEPs when she accepted their money, and therefore Reisinger was not eligible for the exemption that she claimed.

The CFTC has charged the defendants with misrepresentation, operating a commodity pool without registration, and failure to follow regulation. The Commission is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalty, and commodity trading and registration bans.

Read more about this CFTC commodity pool operator enforcement action.
Creative Commons License photo credit: Jan Tik

 

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