February 13, 2015
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Order requiring Defendants Scott M. Ross, formerly of Gilberts, Illinois, and his companies, Maize Capital Management, LLC and Maize Asset Management, LLC, jointly to pay $5,402,818.89 in restitution to the participants in his fraudulent and illegal “Maize Fund” investment scheme, as well as a $1.3 million civil penalty. The court previously entered a Consent Order that imposes permanent trading and registration bans against all Defendants. Ross currently is incarcerated in Federal prison for his role in two other fraudulent investment scams.
The Memorandum Opinion and Order, entered by Judge James B. Zagel of the U.S. District Court for the Northern District of Illinois, stems from a CFTC Complaint filed in September 2009, charging Ross and his companies with violating the core anti-fraud provisions of the Commodity Exchange Act (Act) in connection with activities relating to the solicitation and management of a pooled foreign exchange account called the Maize Fund. According to the Complaint, Ross and his companies engaged in extensive fraud and other unlawful conduct by making false statements to prospective investors in marketing materials, issuing false account statements that reflected profits when trading was not profitable, mishandling customer funds, and failing to properly register with the CFTC as a Commodity Pool Operator (see CFTC Press Release 5712-09).
In the Order, the court finds that Ross and his companies unquestionably were the cause of customers’ losses. “[T]he fraudulent acts in this case were, by their nature, a part of every transaction relating to the Fund. Every dollar in the Fund was both obtained and retained through fraud,” the Order finds. The Order further finds that the Defendants violated “core provisions of the Act and these violations severely harmed the Fund’s customers,” thus warranting the imposition of a substantial penalty.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this action are Joseph Konizeski, Elizabeth Pendleton, Michael Tallarico, William Janulis, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
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CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: February 13, 2015