Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich January 29, 2013

The U.S. Commodity Future Trading Commission (CFTC) announced yesterday that it intends to revoke Associated Persons ( AP), Commodity Pool Operator (CPO) and Commodity Trading Advisor CTA) registrations for Crabapple Capital and its principal, Robert A. Christy. The CFTC’s intent to revoke the registrations of the Georgia entity are based on a permanent injunction order that prohibits them from committing any future fraud.

From the CFTC Statement

The CFTC’s notice alleges that Christy and Crabapple are subject to statutory disqualification of their registrations based on a consent order for permanent injunction entered by the U.S. District Court for the Northern District of Georgia on October 16, 2012 (see CFTC Press Release 6400-12, October 23, 2012). The consent order prohibits Christy and Crabapple from committing further fraud, among other violations as charged, and includes findings that Christy and Crabapple fraudulently misappropriated over $1 million of pool participant funds, fraudulently solicited prospective pool participants, and made material false statements to pool participants.

Crabapple Capital and its principal were held liable for a fraudulent CPO Ponzi scheme. They’ve been ordered to pay $1,099,598 to victims for restitution. Additionally, they’ve been ordered to pay a $1,099,598 civil monetary penalty.

CFTC and Commodity Pool Fraud

At the end of 2012, the CFTC issued enforcement actions against a number of firms and individuals who are alleged to have engaged in commodity pool scams. It remains to be seen whether the agency’s enforcement strategy is curtailing commodity pool scams, but the pace of enforcement seems to have slowed since a major regulatory blitz in November and early December. Could this suggest that the CFTC’s diligence is working?

The CFTC did manage to regulate against a $340,000 commodity pool fraud on January 15. A Federal Court in Nevada 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.

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