Steven Scott, a Dallas resident, was found guilty of operating a Ponzi scheme type operation that solicited over US $1.1 million from investors. The fraudster duped investors over a two-year period, among the charges Scott was found guilty of running an unregulated commodity pool scheme. The charges require the defendant to pay $766,625 in restitution and a $700,000 financial penalty.
The Federal Court’s order comes on the back of a complaint issued by the CFTC which outlined the concerns raised against Scott. Apart form the monetary fines, Scott has been permanently barred from registering as a regulated person by the CFTC.
Details in the Court Order state that Scott’s two-year scheme took place from at least January 5, 2009 to March 30, 2011. Scott fraudulently solicited at least $1,146,000 from 43 pool participants to participate in pooled investment vehicles to trade in off-exchange agreements, contracts, or transactions in foreign currency (forex) on a leveraged or margined basis.
Understanding the Gaps in Forex TradingGo to article >>
Scott, directly and by word of mouth, solicited pool participants located in Texas and solicited some pool participants by email. Pool participants included Scott’s friends, family members, and other members of the general public.
Scott was found to have used investor funds for his own expenses and was redepositing funds into other investors’ accounts to use the funds as profits and principal payments.
The CFTC has been actively investigating schemes that misappropriated client funds. On its website the watchdog provides an overview of regulated investments and outlines points that investors should be aware of when assessing an investment scheme.