The US Commodity Futures Trading Commission has entered orders against Kenneth L.
The US Commodity Futures Trading Commission has entered orders against Kenneth L. Branch of New Castle, Delaware, and Cocoon Trade requiring them to pay USD632,787 in restitution to defrauded customers and USD910,000 in civil penalties.
The orders also permanently prohibit them from engaging in any commodity-related activity, including registering with the CFTC in any capacity.
The orders settle a CFTC enforcement action filed in the US District Court for Maryland on 28 March 2008.
The default order finds that Cocoon, through the acts of Branch, fraudulently solicited at least USD1.4m from at least 46 individuals to invest in commodity futures, either through a commodity pool or individual trading accounts that Branch would manage on their behalf.
According to the default order, Cocoon, through the acts of Branch, misappropriated at least USD941,897 of customer funds to pay purported profits to pool participants and to pay for personal expenses.
The order also finds Cocoon committed registration and regulatory violations in connection with the operation of the commodity futures pool and individual managed trading accounts.
