Fraud

CFTC charges Boston resident John Wilson and his company with commodity pool fraud

The US Commodity Futures Trading Commission has filed a civil complaint in the federal district court in Boston, Massachusetts, against Boston-based John B Wilson and his company, JBW Capital.

The complaint charges that from July 2007 through at least May 2010, the defendants solicited and obtained at least USD1.8m from approximately 30 participants and acted as commodity pool operators without being registered as such or exempt from CFTC registration.

The CFTC complaint, filed in the US District Court, District of Massachusetts, charges that on 13 September 2008, the defendants sent pool participants an email that falsely represented the pool’s value at approximately USD2.5m but failed to disclose that two days earlier, on 11 September 2008, the pool lost approximately USD1m. Furthermore, between 15 and 16 September 2008, the defendants allegedly lost nearly all of the remainder of the pool funds. Shortly thereafter, the defendants solicited and obtained USD100,000 from a new pool participant but failed to disclose the actual losses to the new participant, according to the complaint.

The complaint charges that in September 2008, the defendants provided the new participant a false statement showing his interest in the pool to be less than four per cent when, in fact, this participant’s actual share was approximately 75 per cent of the pool. On 12 December 2008, the defendants allegedly sent the new participant an email that falsely claimed approximately USD20,000 in profits on the participant’s contribution when, in fact, the defendants had lost most of the participant’s investment. This false email led the new participant to invest an additional UDSD100,000, according to the complaint.

In its continuing litigation, the CFTC seeks restitution to defrauded customers, a return of ill-gotten gains, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of federal commodities laws, as charged.

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