For Release: June 12, 2002
MARYLAND MAN AND FIRM SETTLE CHARGES OF FRAUD WITH CFTC
Consent Order issued by District Court Enjoins Defendants Peter Scott and Rothlin & Windsor Capital Management, Inc. from Committing Fraud and also Permanently Bars Defendants from trading in futures and options
WASHINGTON, D.C.- The Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the District of Maryland issued a consent order of permanent injunction against Peter Scott and his firm, Rothlin and Windsor Capital Management, Inc. (R&W Capital), both of Forest Hill, Maryland, settling a CFTC complaint filed in August 2001, which charged that defendants defrauded investors by misappropriating their funds and lying about the fund’s earnings and investments (see CFTC News Release 4549-01, August 7, 2001).
The consent order, entered on June 6, 2002, enjoins the defendants from further violations of the Commodity Exchange Act, as alleged in the complaint, and permanently prohibits them from trading commodity futures contracts or options on commodity futures contracts and from seeking registration with the CFTC or acting in any capacity requiring CFTC registration. In addition, the order requires the defendants to pay restitution and a civil monetary penalty in an amount to be determined either by settlement, which must be reached within 60 days of the entry of the consent order, or by a court hearing to be scheduled upon the expiration of the 60 days.
The order, which the defendants consented to without admitting or denying the findings therein, finds that, from June 1998 until July 2001, R&W Capital, while acting as an unregistered commodity pool operator, and Scott, the sole principal and associated person of the company, fraudulently solicited customers to invest in a commodity pool for the purpose of trading commodity futures and options on commodity futures contracts. During the course of the pool’s trading, Scott and R&W Capital misrepresented -- both orally and in writing -- the value of the pool, the profits generated by the pool’s trading, and the value of each individual investor’s share in the pool, the order finds. Based upon the oral misrepresentations and false profit statements, investors gave the defendants in excess of $7 million to be invested in the pool, the order finds. Furthermore, the order finds that the defendants misappropriated in excess of $2 million for personal use and business expenses, and an additional $1.7 million was lost in trading. Approximately $2.8 million was returned to investors as principal and purported profits.
The following Division of Enforcement staff are responsible for this case: Richard Wagner, Leanna Saler, Jason Gizzarelli, and Kay Majors-Guy.
A copy of the CFTC complaint and consent order may be obtained at www.cftc.gov.
Media Enforcement Contact:
CFTC Division of Enforcement
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