Commodity pool operator to pay USD739,000 on fraud and misappropriation charges
The US Commodity Futures Trading Commission has settled its charges of fraud and misappropriation of customer funds against Robert Lee Roane of Chester, Virginia, and levied a total of USD739,000 in fines and restitution.
The CFTC issued an order which finds that, starting in autumn 2005 and through 2006, Roane solicited the public to invest approximately USD780,000 in a commodity pool by falsely representing his past success as a futures trader and claiming to have a foolproof system. In fact his past trading of commodity futures had not been successful.
The order finds that Roane, in his handling of pool participants' funds, lost the majority of the funds in trading and misappropriated around USD166,500, of which he used USD137,900 to pay for personal expenses and the remaining USD28,600 to repay other participants.
The order also finds that Roane violated the Commodity Exchange Act and CFTC regulations by acting as an unregistered commodity pool operator and defrauding pool participants. He committed further violations in his operation of the commodity pool, including failing to operate the pool as a separate legal entity, accepting funds other than in the pool's name, commingling pool funds with his own, and failing to provide disclosure documents to participants.
Roane is required to pay about USD609,000 in restitution to defrauded pool participants and a USD130,000 civil penalty. The order also imposes a permanent trading ban on Roane and permanently prohibits him from applying for registration with the CFTC.
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