fraud sign

CFTC orders Jeffrey J Kinseth and Virtual Vision Inc to pay more than USD1m over fraud action

Fri, 24/02/2012 - 15:00

The US Commodity Futures Trading Commission (CFTC) has filed and simultaneously settled charges against Jeffrey J Kinseth of Cedar Rapids, Iowa, and his Iowa-based company, Virtual Vision Inc, for fraudulently soliciting individuals to participate in a pooled investment vehicle, misappropriation of investor funds, and issuance of false statements to conceal trading losses and fraud. Kinseth is not registered with the CFTC.

The CFTC’s order requires Kinseth and Virtual Vision jointly and severally to pay a USD575,000 civil monetary penalty and restitution of USD574,936. The order also permanently prohibits Kinseth and Virtual Vision from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.

The order finds that between March 2008 and September 2009 Virtual Vision, by and through Kinseth acting as its director and president, fraudulently solicited and accepted about USD975,360 from approximately 11 individuals to trade commodity futures contracts and leveraged or margined off-exchange foreign currency contracts through Virtual Vision, a pooled investment vehicle.

Kinseth and Virtual Vision misappropriated the majority of the funds, over USD800,000, to make payments to other investors and for Kinseth’s personal use, according to the order. Of the funds traded, Kinseth and Virtual Vision consistently sustained losses and concealed their trading losses and misappropriation by creating and issuing false account statements to investors that reflected purported trading profits, the order finds.


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