Brooklyn commodity pool operator faces penalties for fraud
The US Commodity Futures Trading Commission has filed and settled charges of fraud, filing false documents and misappropriation of customer funds against a registered commodity pool operator, Innovative Capital Management, and its principal and sole owner, Yehuda Belsky.
The CFTC order requires Belsky and Innovative, both of Brooklyn, New York, to pay, jointly and severally, a total of USD1.25m in restitution to five pool participants and a USD100,000 civil monetary penalty.
The order also imposes permanent trading bans on Belsky and Innovative and permanently prohibits them from applying for registration with the CFTC.
According to the CFTC order, from around September 2006 until February this year Belsky and Innovative fraudulently obtained funds totalling USD1.25m from five commodity pool participants.
Instead of using the solicited funds to purchase commodity futures and options contracts, as indicated in marketing materials, Belsky and Innovative misappropriated at least USD385,000 of those funds, created false commodity pool account statements misstating the net asset value and monthly rates of return of the pool, and then delivered these fraudulent statements to pool participants.
The order also finds that during a routine audit by the National Futures Association, Belsky and Innovative provided the NFA with fraudulent account statements purportedly prepared by the futures commission merchant where the pool's account was maintained, and fraudulent bank statements that falsely inflated the amount of pool funds on deposit at that bank.
- By Category
- News from other sites
- Special Reports
- By Location
- Asian Hedge Funds
- BVI Hedge Fund Services
- Bermuda Hedge Fund Services
- Canada Hedge Fund Services
- Cayman Hedge Fund Services
- Channel Islands Stock Exchange
- Future of offshore funds
- Gibraltar Hedge Fund Services
- Guernsey Hedge Fund Services
- Hedge Funds in Germany
- Hong Kong Hedge Fund Services
- Ireland Hedge Fund Services
- Isle of Man Hedge Fund Services
- Jersey Hedge Fund Services
- Jersey Private Equity Services
- Latin American Hedge Funds
- London Hedge Fund Services
- Luxembourg Hedge Fund Services
- Luxembourg Private Equity Services
- Malta Hedge Fund Services
- Middle East Hedge Fund Services
- Singapore Hedge Fund Services
- South African Hedge Fund Services
- Spanish Hedge Funds 2008
- Switzerland Hedge Funds
- US East Coast Hedge Fund Services
- US Hedge Fund Services
- By Subject
Latest Special Report
- By Location