The US Commodity Futures Trading Commission (CFTC) has obtained a federal court order requiring defendants Richmond Hamilton, Jr, and Raleigh Capital Management, Inc (RCM), a Chicago-based registered commodity pool operator, to pay jointly and severally a USD3,015,000 civil monetary penalty. The order also requires Hamilton to pay restitution of USD1,005,000.
The order prohibits Hamilton and RCM from engaging in any commodity-related activity within the jurisdiction of the CFTC, including trading and registering with the CFTC in any capacity.
The permanent injunction order, entered by the Honorable Charles R Norgle, Sr, of the US District Court for the Northern District of Illinois, resolves a CFTC complaint filed on October 28, 2009 (see CFTC Press Release 5744-09, October 30, 2009). The CFTC complaint charged Hamilton and RCM with misappropriating more than USD1 million since May 2004 from the Raleigh Fund, LP, an USD8.3 million commodity pool organized by Hamilton in 1987. The complaint also charged Hamilton with making false statements to the National Futures Association (NFA).
The court’s order finds that, commencing in 2004, Hamilton misappropriated USD1,005,000 from the Raleigh Fund commodity pool. Hamilton then used some of those funds for personal expenses, such as payments for a car and two planes, according to the order.
The order also finds that Hamilton made false representations to the NFA when, as part of a routine audit, the NFA sought details concerning the transfers Hamilton made to himself from the pool. The order finds that Hamilton provided documents for three sham real estate deals that Hamilton claimed to have done with the pool. According to the order, Hamilton also misrepresented other facts to the NFA, including the extent of his personal bank accounts, restrictions he imposed on pool participants’ requests for redemptions and his payment of operating expenses for the fund.
