For Release: May 8, 2002
TEXAS COMMODITY TRADER CHARGED WITH DEFRAUDING CUSTOMERS AND MISAPPROPRIATING CUSTOMER FUNDS
CFTC Charges Dewey V. Wiles and His Company, Futures Exchange Company, Inc., with Fraudulently Soliciting Funds to Trade Commodity Futures
WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) announced the filing of a three-count injunctive complaint against Dewey V. Wiles (Wiles) of Garland, Texas, and Futures Exchange Company, Inc. (FEC) of Dallas, Texas.
The complaint, filed on May 6, 2002, in a federal district court in Texas, charges that Wiles and FEC fraudulently solicited customers to invest more than $770,000 to trade commodity futures contracts and misappropriated more than $150,000 in customer funds that customers had given them to invest. The complaint also charges FEC and Wiles with registration violations.
The CFTC complaint specifically alleges that between approximately April 1998 and October 2001, Wiles and FEC solicited more than $770,000 from about 80 customers by falsely claiming that customers would realize large profits from trading commodity futures, minimizing the risks involved in such trading, and misrepresenting the performance of a trading system. Wiles and FEC allegedly also guaranteed profits to many customers, and fraudulently reassured customers about the success of their investments by issuing them false monthly statements reflecting bogus profits.
In sharp contrast to the allegedly false monthly statements showing large increases in account values, Wiles’s actual trading on behalf of customers allegedly resulted in net trading losses. The complaint further claims that Wiles was supposed to collect fees solely from net trading profits, but having failed to achieve those profits, allegedly misappropriated customer funds of more than $150,000 and spent them to pay for personal expenses, including payments on a BMW.
The CFTC is seeking preliminary and permanent injunctive relief, restitution for customers, disgorgement of ill-gotten gains, and civil monetary penalties up to $120,000 for each violation, or triple the monetary gain to defendants for each violation of the Commodity Exchange Act.
The CFTC appreciates the assistance of the United States Attorney’s Office for the Northern District of Texas in filing this matter.
The following Division of Enforcement staff are responsible for this case: Susan Bovee, Michael Solinsky, Patricia Gomersall and Ghassan Hitti.
A copy of the CFTC complaint and the restraining order may be obtained at www.cftc.gov.
Susan B. Bovee
CFTC Division of Enforcement
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