The U.S. Commodity Futures Trading Commission (CFTC) has obtained today an emergency order issued by the federal order allowing it to freeze the assets of defendant Anthony Eugene Linton of Tucson, Arizona, of The Private Trading Pool. The court order also grants the CFTC immediate access to the books and records of the firm, and prohibits their destruction.
On January 11, 2011, the CFTC filed an enforcement action before the U.S. District Court for the District of Arizona, charging Linton with fraud and misappropriation of customer funds in connection with a Ponzi scheme involving off-exchange foreign currency (forex) trading.
Specifically, the CFTC complaint alleges that, from at least October 2007 to the present, Linton fraudulently solicited and accepted at least $650,000 from at least 19 customers for the purpose of trading off-exchange forex contracts. The complaint charges that Linton falsely represented to customers that they would receive a 100 percent annual return on their investments in The Private Trading Pool (PTP) and that the software trading system he developed allowed customers to “profit every time” from his forex trades.
Linton further allegedly misrepresented that there were “no risks whatsoever” associated with trading forex through PTP, that customer funds were accessible “within 24 hours” of a requested redemption and that customers could receive “their profits” by check monthly. However, what little forex trading Linton did using customer funds resulted in consistent net losses and, in the aggregate, he lost more than 90 percent of the funds traded, according to the complaint.
The complaint also charges Linton with misappropriating customer funds to make personal mortgage, car and credit card payments. Linton allegedly used some customer funds to buy and sell items on Ebay and converted large sums of customer funds into cash and stashed it in a safe in his home. Linton allegedly paid earlier PTP customers purported profits with more recent customers’ funds, as is typical of a Ponzi scheme.
Aside from moving for the issuance of the freeze order, the CFTC also seeks rescission of all contracts and agreements, restitution to defrauded customers, a civil monetary penalty and a permanent injunction against further violations of the federal commodities laws and against further trading. The CFTC likewise seeks an order requiring the defendant to make an accounting of all assets and liabilities, including funds received from or paid to participants or other persons in connection with forex transactions or purported forex transactions.