The US Commodity Futures Trading Commission (CFTC) has fined Sharief Deona McDowell over $4.7 million for fraud "in connection with options on commodity futures contracts by a commodity trading advisor (CTA) and for failing to register as a CTA." The regulator already settled the charges.

Restitutions and Fines

According to the official announcement, the regulatory order requires McDowell to pay more than $2.37 million in restitution and a matched amount in a civil monetary penalty. The commodities market regulator issued a cease and desist order against McDowell, restricting further violations of American laws, and imposed permanent registration and trading bans.

However, the regulator added that there is no guarantee that the regulator can fully compensate the victims.

The CFTC's action came after McDowell had already pled guilty last November to a criminal case, which is now pending sentencing on 30 June.

A Fraudulent Scheme

The American regulator detailed that McDowell operated Presidential Investments LLC, a company she founded, between October 2018 and March 2022. McDowell claimed to be engaged in discretionary trading of futures and options contracts on behalf of the clients. She acted as a CTA without being one. Her entire operation was fraudulent.

The company defrauded at least 29 individuals or entities of more than $2 million. She was even blamed for misappropriating investors' funds for personal use.

In her communication with prospective and existing investors via telephone, text message, and email, the regulator alleged that McDowell knowingly "made material misrepresentations and omitted material facts about her use of client funds and the profits purportedly earned by her clients."

On top of that, McDowell told clients that the funds transferred to Presidential Investments were being used for trading options and futures contracts on their behalf. However, in reality, she did not conduct any trading and "knowingly misappropriated client funds for her direct personal benefit."

"To conceal and perpetuate her fraudulent scheme, McDowell issued fabricated trade confirmations and updates to clients that falsely reflected profitable returns from her supposed trading activity," the CFTC added.