The US Commodity Futures Trading Commission has obtained a default judgment and permanent injunction order against defendant Nicholas Cosmo, formerly of Lake Grove, New York, charged with defrauding investors of tens of millions of dollars in a commodity futures trading scheme.
The court order finds that, from at least January 2004 through December 2008, Cosmo engaged in a fraudulent scheme in which tens of millions of dollars were solicited from investors to invest in bridge loans and merchant advances.
Instead, Cosmo used investors’ funds, in part, to engage in unauthorised commodity futures trading that resulted in tens of millions of dollars in trading losses, according to the order.
The order also finds that Cosmo’s futures trading and trading losses were never disclosed to investors.
The order requires Cosmo to pay a USD240m civil monetary penalty, imposes permanent trading and registration bans, and permanently bars Cosmo from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from CFTC registration.
In a related criminal case, Judge Denis R Hurley sentenced Cosmo to 300 months in prison and ordered him to pay restitution to investors in the amount of USD179,195,232.63.