For Release: August 7, 2001
CFTC CHARGES MARYLAND MAN AND HIS COMPANY WITH DEFRAUDING 600 INVESTORS IN A COMMODITY POOL
CFTC Alleges That Defendants Peter Scott and R&W Capital Management, Inc. Fraudulently Solicited Over $2 Million from Investors and Misappropriated Investor Funds For Personal Use
WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced today the filing of a seven-count civil injunctive action on August 6, 2000, in the United States District Court for the Northern District of Maryland, against defendants Peter Scott and R&W Capital Management, Inc. (R&W Capital), both of Forest Hill, Maryland. The CFTC charged Scott and R&W Capital with fraudulently operating a commodity pool, known as Rothlin and Windsor Future Fund (the Future Fund), to trade commodity futures contracts and options on futures contracts, and misappropriating investors’ funds for personal benefit, including payment of income taxes and the purchase of an automobile. In accordance with the CFTC’s request, the Honorable Benson E. Legg entered a restraining order freezing the assets and preserving the books and records of Scott and R&W Capital.
In papers filed with the Court, the CFTC included sworn statements of auditors for the National Futures Association that assert that Scott admitted that he started accepting investor funds and trading commodity futures and options for the Future Fund in June 1998. According to the sworn statements, Scott originally accepted funds from seven people, but the pool grew to over 600 investors through word of mouth. He estimated that he received over $2 million from investors. Scott also admitted that, after an initial period of profitability, he began losing money almost every month, but continued to tell investors each month that his trading was profitable. By June 2001, he was telling investors that the value of the Future Fund was approximately $13 million when, in fact, it was only $1.5 million. Scott further admitted that he paid himself $3,000 a week for operating the pool, that he used investor funds to pay for personal expenses, including buying a Ford truck, and that in total, he paid himself over $900,000.
The CFTC complaint charges Scott and R&W Capital with misrepresenting to participants and prospective participants the trading done by and the performance record of the Future Fund, and the value of each investor’s shares in the Fund, issuing false account statements and making oral misrepresentations indicating that profitable trading had occurred on behalf of the Future Fund when, in fact, no such profits were made, and misappropriating funds. The CFTC also alleges that defendants unlawfully solicited and accepted customer funds directly into the pool operator’s bank accounts, that R&W Capital failed to register as a commodity pool operator and failed to provide customers with accurate account statements, and that Scott failed to register as an associated person of the pool operator.
Court Hearing on CFTC's Motion for a Preliminary Injunction Set for August 10th
In its continuing litigation, the CFTC is seeking preliminary and permanent injunctive relief, an accounting, restitution to customers, disgorgement of ill-gotten gains, and civil monetary penalties in amounts of not more than the higher of $110,000 for each violation (or $120,000 for each violation committed on or after October 23, 2000), or triple the monetary gain to the defendants. A hearing has been scheduled on the CFTC’s motion for a preliminary injunction in the case for August 10 at 9 a.m. before Judge Andre M. Davis.
The CFTC appreciates the assistance of the National Futures Association in this action.
A copy of the order can be found at
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Media: Case Contact
Richard Wagner, Associate Director,
CFTC Division of Enforcement