The US Commodity Futures Trading Commission (CFTC) filed a civil complaint charging CIS Commodities LLC (CIS) of Henderson, Nevada, and its founder and president, Allen Nicholas Ward, of Aspen, Colorado, with misappropriation of customer funds and misrepresentations and issuing false written statements to a customer. The complaint also charges Trans Global Investments, LLC (Trans Global), a Nevada company, its President, Charles Leroy Timberlake, of Plano, Texas, Ward, and CIS with misrepresentation and issuing false written statements.
On June 30, 2011, the day after the CFTC complaint was filed, Judge Gloria M Navarro of the US District Court for the District of Nevada entered an order freezing the defendants’ assets and prohibiting the destruction of their books and records. The court set a hearing on the CFTC’s motion for a preliminary injunction for July 12, 2011.
Specifically, the CFTC complaint alleges that, between November 2006 and February 2009, CIS, acting through Ward, misappropriated at least USD175,500 in customer funds solicited for trading commodity futures. Ward allegedly used those funds to pay CIS’s operating expenses and legal fees, and for personal uses, such as residential rent, automobile expenses, meals, and entertainment.
The complaint also charges Ward and CIS with making wilful or reckless misrepresentations to prospective and existing CIS customers, including that customer funds deposited with CIS would be used to trade commodities and that an experienced third-party trader would trade the funds.
The complaint also charges Trans Global, Timberlake, and Ward with fraud in connection with operating the Trans Global commodity pool. For example, Trans Global, Timberlake and Ward allegedly misrepresented to pool participants that pool funds would be held in a segregated account and that Timberlake and/or Trans Global were registered with the CFTC.
CIS and Ward also allegedly issued false statements to at least one CIS customer, and Trans Global, Timberlake, and Ward allegedly issued false written statements to Trans Global pool participants. The written statements allegedly falsely depicted the profitability of the customer’s or pool participants’ investments.
In its continuing litigation, the CFTC seeks restitution, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of federal commodities law.
