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The U.S. Commodity Futures Trading Commission (CFTC) today announced that the Honorable Samuel Conti of the U.S. District Court for the Northern District of California entered a Consent Order for Permanent Injunction imposing permanent trading and registration bans against Defendants Glenn Kane Jackson of Healdsburg, California, and Highlands Capital Management, L.P. (Highlands Capital), a California limited partnership based in San Francisco, California, for operating a fraudulent Forex pool scheme.
Specifically, the CFTC Complaint charged Jackson and Highlands Capital, in connection with the fraudulent scheme, with misappropriating customer funds, issuing false account statements to customers, misrepresenting Jackson’s success and background as a forex trader, and misrepresenting the reasons why Defendants could not honor customer withdrawal requests.
The Court’s Order, entered on October 1, 2014, finds that Highlands Capital and Jackson, individually and while acting in his capacity as the founder and manager of Highlands Capital, fraudulently solicited and misappropriated customer funds in connection with the operation of two purported Forex pools between June 2008 and December 2009.
According to the Order, Defendants:
- Made false claims regarding Jackson’s background and success as a forex trader, including the track record of the purported pools;
- Sent false account statements and trading summaries to pool participants claiming that Defendants were engaging in profitable Forex trading when, in fact, they were not; and,
- Used only a portion of the funds collected to trade Forex, which resulted in net losses, and the funds not returned to pool participants or lost in trading were misappropriated by Defendants.
In a parallel criminal action, Jackson was sentenced to seven years in prison and ordered to pay over $8.6 million in restitution and fines
On June 15, 2010, Jackson was arrested after being charged by the Marin County, California District Attorney with a 38-count Complaint alleging investment fraud based on the same conduct alleged in the CFTC Complaint. On April 5, 2013, Jackson pled guilty to 27 felony counts of false statements or material omissions in the offer or sale of securities. He was sentenced to seven years in prison and ordered to pay criminal restitution in the amount of $3.8 million and fines totaling $4.8 million. See People of the State of California v. Glenn K. Jackson (Docket No. SC170537A) (Superior Court of California, Marin County) (Simmons, J.).
According to the Court’s Order: “The Defendants’ violations of the Act [Commodity Exchange Act] merit the award of significant restitution. However, the Court recognizes that Jackson is subject to a criminal restitution obligation of $3.8 million entered in the Jackson Criminal Action for the same misconduct at issue in this civil action. Because the criminal court has already awarded restitution to defrauded customers in an amount greater than would be warranted in this case, the Court is not ordering additional restitution against Defendants in this Consent Order.”
The CFTC appreciates the assistance of the Tiburon Police Department and the State of California Department of Corporations, Securities Regulation Division.
The following CFTC Division of Enforcement staff members are responsible for this action: Jennifer Diamond, Daniel Jordan, Michael Loconte, Rick Glaser, and Richard Wagner.
For the official press release from the CFTC, click here.