Commodity pool The Kane Capital Investment Group and its President, Amrit Jaswant Singh Chahal have been ordered by a Viriginia federal court to pay USD1.2 million in a case stemming from a CFTC Complaint charging the defendants with commodity futures fraud, commodity pool fraud, registration violations, and illegally commingling funds.
The Order requires the defendants to pay USD1,232,510.41 in restitution and imposes permanent trading and registration bans as well as prohibiting Chahal from further violations of the Commodity Exchange Act (CEA) and CFTC Regulations. The Order provides that the restitution obligation is deemed satisfied by entry of a criminal forfeiture judgment of an equal or greater amount in the case of United States v Amrit Jaswant Singh Chahal, Case No 1:18-cr-00152-LMB (ED Va 2018) (the Criminal Action).
According to the Order, from at least 1 January, 2015, through 31 December, 2017, the defendants fraudulently solicited and misappropriated customer funds in connection with offers to trade E-mini NASDAQ 100, E-mini S&P 500, Cboe Volatility Index, and NYMEX WTI Light Sweet Crude Oil futures contracts, among others. The Order further finds that the defendants’ trading was on balance unprofitable, causing deep losses that they attempted to conceal by making material misrepresentations and omissions to pool participants. For example, the defendants touted annual averaged trading profits of between 28 per cent and 34 per cent, and sometimes higher, despite knowing at the time that Kane Capital made no profits and was suffering losses. Chahal also doctored trading account statements for the purpose of concealing losses and attracting additional pool participants.
The Order also finds that the defendants misappropriated pool funds by using new deposits to make Ponzi scheme-like payments to certain pool participants and by using the funds to pay Chahal’s personal expenses, including his rent, utility, and credit card bills.
On 2 November, 2018, Chahal pleaded guilty to wire fraud and commodities fraud charges in the Criminal Action. On 15 March, 2019, the Court sentenced Chahal to 30 months in federal prison and entered an Amended Preliminary Order of Forfeiture requiring him to pay a criminal forfeiture judgment in the amount of USD1,232,510.41.
