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Screenshot of a breaking news alert e-mail from Q2 2017
The U.S. Commodity Futures Trading Commission (CFTC) has announced that the U.S. District Court for the Northern District of Illinois entered a Consent Order for permanent injunction against David Bryant of Los Angeles County, California.
The Order requires David Bryant to pay a $3 million civil monetary penalty, plus $3,087,343 in restitution. The Order also imposes permanent trading and registration bans on Bryant, and prohibits him from committing further violations of the anti-fraud and registration provisions of the Commodity Exchange Act, as charged.
The Order arises out of a CFTC Complaint filed on December 2, 2015, charging Bryant with fraudulent solicitation, sending false statements to pool participants, and acting as a Commodity Pool Operator (CPO) without being registered with the CFTC, as required.
According to the Order, between June 2014 and December 2015 Bryant solicited at least $4,644,785 from multiple individuals, many of them family and friends, by representing that their funds would be traded as a pool in commodity futures. Bryant deposited these funds into various accounts that he controlled, where the funds were co-mingled with his personal funds.
Bryant failed to disclose to pool participants that he lost approximately $2,661,080 of their funds trading commodity futures in his personal trading accounts and failed to disclose to pool participants that he was trading their funds in his own personal trading accounts, the Order finds. To hide his trading losses, he emailed several pool participants statements that falsely reported that the value of each individual’s original investment had increased, according to the Order.
The Order further finds that Bryant returned approximately $1,630,942 million to pool participants, but he failed to return the approximately $3,087,343 million in remaining funds that he received from pool participants. Bryant lost these funds trading futures or misappropriated them for his own personal expenses, according to the Order.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
More on the fine to David Bryant can be seen here.