A Georgia resident trader and his defunct firm will pay $500,000 to settle the U.S. Commodity Futures Trading Commission’s allegations that they conducted illegal transactions with retail customers, provided fraudulent misrepresentations and acted as an unregistered commodity pool operator.
Arthur Toole III of Atlanta, Georgia, and his companies Billionaire Investor Group (BIG), The Toole Group Inc. (Toole Group) and Catalyst Traders LLC (Catalyst), were ordered to pay the fine to settle charges that they allegedly operated three commodity pools while not being registered as authorised CPOs.
Arthur also allegedly acted as a CPO for a part of the relevant period under a falsely claimed exemption from the registration requirement, as required under the Commodity Exchange Act and CFTC regulations.
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Simultaneously bringing and settling charges of solicitation fraud and misappropriation, the CFTC ordered Toole and his firms to pay back the $293,141 they allegedly misappropriated from investors, plus a $200,000 monetary penalty for the scheme.
Along with the civil penalty, Toole also agreed to a permanent bar from trading futures and registration with the CFTC, according to a proposed consent order.
According to the commission, Toole solicited about $375,000 in funds from several investors between February 2011 through at least January 2016, claiming that the monies would be traded through experts on Chicago Mercantile Exchange Euro FX futures and E-Mini Dow futures contracts.
However, pool participants suffered net losses amounting to $293,141. And instead of investing the funds as he claimed, Toole used them to pay false monthly returns to previous participants and for personal and business expenses.