On May 1, the CFTC announced that the U.S. District Court for the Eastern District of Michigan entered a consent order against a commodity pool operator and his firm for allegedly operating a fraudulent commodity pool. The order found that, from at least mid-2017 through April 2022, the defendants allegedly solicited and retained millions of dollars of investments by making false and misleading statements, including claims that the pool was “extraordinarily profitable” despite “catastrophic” trading losses, exaggerating assets under management, and falsely representing that the pool’s financial statements were audited by an outside firm. The CFTC further alleged that the defendants issued falsified monthly account statements and fabricated financial reports to prospective and existing pool participants. In doing so, the operator pooled millions of dollars from dozens of participants in the U.S. and abroad.

The consent order permanently prohibits the defendants from: (i) further violations of the Commodity Exchange Act and CFTC regulations; (ii) trading for others; (iii) soliciting or accepting funds for trading; and (iv) registering with the CFTC. In its press release, the CFTC stated that DOJ separately charged one of the defendants in October 2022 with wire fraud based on the same conduct described in the CFTC’s complaint. According to the consent order, the defendant pleaded guilty and, in 2025, received a sentence of eight years and four months in prison along with an order to pay $34,346,948 in restitution. The court recognized these sanctions in its order, concluding all claims brought by the CFTC in August 2022.