The US District Court for the Middle District of Tennessee on March 16 delivered a summary judgment order penalizing two Kentucky men, Rodney Phelps and Jason Castenir and their co-founded company, Maverick Asset Management LLC, over $5 million in monetary sanctions.
A press statement from the Commodity Futures Trading Commission (CFTC) said the order also included a permanent injunction and equitable relief against the parties. The new judgment follows the sentencing of Phelps to 108 months in federal prison in September 2019 after a jury convicted him of 13 counts of fraud and conspiracy in connection with the same underlying facts as the CFTC’s case, the Commission said.
Additionally, the court slammed permanent trading and registration bans and a permanent injunction from further violations of the Commodity Exchange Act (CEA) and CFTC regulations on the men, the agency added. The new summary judgment follows an earlier order of default judgment entered by the same court against Castenir and Maverick, the company.
A Breakdown of the Fines
The $5 million in fines include a $420,000 civil monetary penalty against Phelps and a $2,461,301 civil monetary penalty, jointly, against Castenir and Maverick. In addition, the orders require Maverick and Castenir to pay $1,172,800 in restitution and Phelps to pay $1,172,800 in restitution to defrauded customers.
“The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable,” CFTC wrote in the release.
Backstory
According to the statement, Phelps and Castenir in 2013 solicited more than $1.2 million in funds from investors through Maverick. The US court found that the solicitations were boosted by false materials claiming that Phelps had an extensive history of investing successfully in commodity trading markets.
The solicitations falsely assured investors that their risk would be ‘limited’, and that they could expect ‘guaranteed returns’ of more than 100% per year. Further, the court said Maverick promised investors that their money would be invested in commodity trading markets with the goal of earning substantial returns.
CFTC wrote: “According to the summary judgment order, Phelps and Castenir actually used less than $400,000 of the invested funds for trading. The remaining investor funds were misappropriated. Nearly all of the funds used for commodity trading were lost in unprofitable trades.
“Nevertheless, throughout 2013, and despite the losses, Phelps, Castenir and Maverick sent investors false account statements showing their investments yielded remarkably high gains. Throughout the entire investment operation, Phelps never registered with the CFTC as a commodity trader, despite the fact that Maverik engaged in numerous regulated activities.”
CFTC’s Watchdog Record
CFTC earlier this month filed a civil enforcement action against four operators for running a $44 million Bitcoin
Bitcoin
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Read this Term Ponzi scheme
Ponzi Scheme
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
Read this Term. The operators Dwayne Golden of Florida, Jatin Patel of India, Marquis Egerton of North Carolina and Gregory Aggesen of New York, were charged for misappropriating millions of dollars. Of the four, Golden, Patel and Egerton were accused of fraudulently soliciting more than $23 million worth of Bitcoins through the websites: Empowercoin and Ecoinplus.
Earlier in February, the American commodity trade watchdog burst another fraudulent trading scheme involved in binary options solicitation and trading fraud. The regulator issued an enforcement order against Golden Signals LLC and its owner Richard D. Neal for fraud and settled for $2.6 million. Golden Signals acted as a commodity trading advisor (CTA) and commodity pool operator (CPO), although it did not register as either of them. In addition, the company advertised its services across social media channels without making proper disclosure.
The US District Court for the Middle District of Tennessee on March 16 delivered a summary judgment order penalizing two Kentucky men, Rodney Phelps and Jason Castenir and their co-founded company, Maverick Asset Management LLC, over $5 million in monetary sanctions.
A press statement from the Commodity Futures Trading Commission (CFTC) said the order also included a permanent injunction and equitable relief against the parties. The new judgment follows the sentencing of Phelps to 108 months in federal prison in September 2019 after a jury convicted him of 13 counts of fraud and conspiracy in connection with the same underlying facts as the CFTC’s case, the Commission said.
Additionally, the court slammed permanent trading and registration bans and a permanent injunction from further violations of the Commodity Exchange Act (CEA) and CFTC regulations on the men, the agency added. The new summary judgment follows an earlier order of default judgment entered by the same court against Castenir and Maverick, the company.
A Breakdown of the Fines
The $5 million in fines include a $420,000 civil monetary penalty against Phelps and a $2,461,301 civil monetary penalty, jointly, against Castenir and Maverick. In addition, the orders require Maverick and Castenir to pay $1,172,800 in restitution and Phelps to pay $1,172,800 in restitution to defrauded customers.
“The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable,” CFTC wrote in the release.
Backstory
According to the statement, Phelps and Castenir in 2013 solicited more than $1.2 million in funds from investors through Maverick. The US court found that the solicitations were boosted by false materials claiming that Phelps had an extensive history of investing successfully in commodity trading markets.
The solicitations falsely assured investors that their risk would be ‘limited’, and that they could expect ‘guaranteed returns’ of more than 100% per year. Further, the court said Maverick promised investors that their money would be invested in commodity trading markets with the goal of earning substantial returns.
CFTC wrote: “According to the summary judgment order, Phelps and Castenir actually used less than $400,000 of the invested funds for trading. The remaining investor funds were misappropriated. Nearly all of the funds used for commodity trading were lost in unprofitable trades.
“Nevertheless, throughout 2013, and despite the losses, Phelps, Castenir and Maverick sent investors false account statements showing their investments yielded remarkably high gains. Throughout the entire investment operation, Phelps never registered with the CFTC as a commodity trader, despite the fact that Maverik engaged in numerous regulated activities.”
CFTC’s Watchdog Record
CFTC earlier this month filed a civil enforcement action against four operators for running a $44 million Bitcoin
Bitcoin
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Read this Term Ponzi scheme
Ponzi Scheme
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of “high-yield investment programs”, “offshore investment”, or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
Read this Term. The operators Dwayne Golden of Florida, Jatin Patel of India, Marquis Egerton of North Carolina and Gregory Aggesen of New York, were charged for misappropriating millions of dollars. Of the four, Golden, Patel and Egerton were accused of fraudulently soliciting more than $23 million worth of Bitcoins through the websites: Empowercoin and Ecoinplus.
Earlier in February, the American commodity trade watchdog burst another fraudulent trading scheme involved in binary options solicitation and trading fraud. The regulator issued an enforcement order against Golden Signals LLC and its owner Richard D. Neal for fraud and settled for $2.6 million. Golden Signals acted as a commodity trading advisor (CTA) and commodity pool operator (CPO), although it did not register as either of them. In addition, the company advertised its services across social media channels without making proper disclosure.
Source: https://www.financemagnates.com/institutional-forex/us-court-fines-kentucky-men-5m-for-commodity-futures-pool-fraud/