February 20, 2014
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the revocation of the registrations of Joshua W. Wallace, a resident of Oregon, and his Oregon-based company, System Capital, LLC (System Capital). System Capital was registered with the CFTC as a Commodity Trading Advisor and Wallace was registered as an Associated Person of System Capital. Wallace is the sole principal and president of System Capital.
The CFTC filed a civil Complaint against Defendants Wallace and System Capital on November 23, 2010, charging them with solicitation fraud and making false statements to the National Futures Association (NFA) (see CFTC Press Release 5940-10). Subsequently, on March 14, 2013, the U.S. District Court for the Southern District of New York entered an Order of permanent injunction against the Defendants that imposes permanent trading and registration bans against them and prohibits them from violating the Commodity Exchange Act, as charged. The court’s Order also required Wallace and System Capital each to pay a $420,000 civil monetary penalty (see CFTC News Release 6539-13).
On December 23, 2013, the CFTC Judgment Officer issued a Decision against Wallace and System Capital, finding that they were statutorily disqualified from CFTC registration based on both the Order of permanent injunction and on the criminal conviction of Wallace on May 21, 2013, in which Wallace pleaded guilty to commodities fraud and was sentenced to serve 27 months in prison (U.S. v. Wallace, 11 crim 124-01 (LTS) (S.D.N.Y.)). The Judgment Officer’s Decision became a final Order of the CFTC on January 22, 2014.
The CFTC thanks the NFA, the Federal Bureau of Investigation, and the U.S. Attorney’s Office for the Southern District of New York for their assistance.
CFTC Division of Enforcement staff members responsible for this case are Mark A. Picard, Elizabeth C. Brennan, Philip Rix, Steven Ringer, Lenel Hickson, and Manal M. Sultan.
Last Updated: February 20, 2014