CPO/CTA Charged With Fraudulent Allocation Scheme

The CFTC has filed a federal civil enforcement action against Donald A. Newell and his company Quiditty, LLC (a registered CPO and CTA), charging them with fraudulently allocating commodity futures and options trades to a proprietary account at the expense of customer accounts managed by the firm.

According to the complaint, the defendants placed trades with FCMs without providing account numbers and waited to see whether the trades were profitable. Losing trades were largely allocated to customer accounts, while 85% of the trades allocated to the proprietary account were profitable.

The scheme allegedly netted a profit of over $1.1 million between at least October 15, 2008 and at least March 19, 2009. The defendants allegedly failed to keep required records, and Newell allegedly lied to the CFTC during the investigation, claiming he provided account numbers when placing orders.

The CFTC seeks restitution for defrauded customers, a return of ill-gotten gains, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of federal commodities laws.

Read more.

Photo credit: Chilli Media

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email

Stay On Top Of The Debt Relief Industry's Regulatory Landscape

On November 6-7, 2022, Shipkevich PLLC will be hosting a Regulatory Workshop in Costa Mesa, California focusing on the fundamental regulatory issues facing debt relief professionals and how they can adapt.