The US Commodity Futures Trading Commission (CFTC) has charged Hendrik A Van Beuningen and his company, DeBrink Trading Fund I (DeBrink) with fraud, misappropriation, and issuing false statements in connection with a commodity pool they operated.
The CFTC Complaint, filed under seal on 28 March, 2016, alleges that, from at least January 2014 to at least January 2016, the Defendants fraudulently solicited and accepted at least USD505,000 from at least five members of the public for the purported purpose of pooling funds to trade various futures contracts. The CFTC’s Complaint also charges the Defendants with registration violations concerning their commodity pool.
On 29 March, 2016, US District Judge Timothy C Batten, Sr entered a Statutory Restraining Order freezing the Defendants’ assets, prohibiting the Defendants from destroying their records, and granting the CFTC immediate access to those records.
Defendants allegedly transferred only approximately 45 per cent of the pool participants’ USD505,000 to a trading account in the name of the commodity pool at a Futures Commission Merchant (FCM). The Defendants’ overall trading of the pool funds was never profitable, with nearly all of the pool money lost by 30 September, 2015, per the CFTC’s Complaint.
Additionally, the Defendants are charged with misappropriating pool participants’ funds, including all USD140,000 in pool participant funds received from November 2015 to January 2016, none of which ever made it into an FCM account in the name of the pool.
According to the CFTC complaint, despite their trading losses, the Defendants fraudulently touted to pool participants on DeBrink’s website a trading return of 19.14 per cent for 2014 and a cumulative return of 31.77 per cent through September 2015 and provided pool participants with false account statements that misrepresented the pool’s profitability and the value of each participant’s interest in the pool. Further, the Defendants’ false account statements referenced management fees that were far in excess of the amounts to which the Defendants were entitled under agreements with pool participants, according to the Complaint. In an effort to cover up their fraud, the Defendants allegedly provided DeBrink’s FCM fabricated account statements that purportedly showed funds at another FCM.
In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and injunctions against further violations of the federal commodities laws, as charged.
