Release: 4836-03 (Civ 1:00 CV 0300)
For Release: September 9, 2003
U.S. COMMODITY FUTURES TRADING COMMISSION SETTLES ACTION AGAINST REMAINING DEFENDANTS IN INDIANA COMMODITY POOL FRAUD
Court Orders Defendants James N. Wilson and JNW Management to Pay More Than $210,000 in Civil Penalties and Disgorgement For Involvement in Ponzi Scheme
Washington, D. C. -The U.S. Commodity Futures Trading Commission (CFTC) today announced that the United States District Court for the Northern District of Indiana, Fort Wayne Division, issued a consent order imposing a civil monetary penalty and other sanctions against defendants James N. Wilson, of Anderson, Indiana and Wilson’s employer JNW Management, Inc., of Indianapolis, Indiana.
The consent order, entered on August 29, 2003, by the Honorable William C. Lee, settles CFTC charges against Wilson and JNW Management arising out of the CFTC’s complaint in CFTC v. Phillip L. Ferguson, individually and doing business as Ferguson Financial, B&F Trading and First Investors Group, Inc., et al., 1:00 CV 0300 (see CFTC News Release 4420-00, July 13, 2000). The CFTC’s complaint was originally filed on July 11, 2000. On June 4, 2002, the court entered a default judgment against defendant Ferguson, finding that between 1997 and July 2000, he operated a multi-million dollar commodity pool fraud from a Marion, Indiana brokerage office. The court ordered him to pay $12.8 million in restitution to defrauded investors and a $10.8 million civil penalty.
Meanwhile, in 2002, the CFTC amended its complaint and added Wilson and JNW as defendants, as well as others against whom consent orders of permanent injunction have already been entered. The CFTC’s amended complaint alleged that Wilson solicited at least 120 investors in the pool and that he provided copies of account statements and “trade logs” that reported false gains and fictitious trades to pool participants and prospective participants. Based on those allegations, the complaint charged Wilson with engaging in transactions that operated as a fraud on participants of the commodity pool. In addition, the complaint charged that Wilson illegally acted in a capacity requiring registration with the CFTC, without being so registered. The complaint further alleged that Wilson was acting as an agent of JNW Management and that JNW Management was liable for Wilson’s alleged violations.
The court ordered Wilson and JNW Management to pay a joint and several civil monetary penalty in the amount of $110,000 and to disgorge $100,182 Wilson received from Ferguson. In addition, the court enjoined and permanently prohibited the defendants from engaging in transactions that operate as a fraud upon commodity pool participants or prospective participants and enjoined and permanently prohibited Wilson from acting as an associated person of a commodity pool operator without being properly registered with the CFTC.
The defendants neither admitted nor denied the allegations in the complaint or the findings in the consent orders.
Wilson and JNW Management were the last remaining defendants in this action. The Commission settled with other defendants in February 2003, when the court entered consent orders of permanent injunction against them and imposed sanctions that included more than $11 million in restitution and civil monetary penalties (see CFTC News Release 4768-03).
The following Division of Enforcement staff were responsible for the case: David Terrell, Hugh J. Rooney, Joy McCormack, Elizabeth M. Streit, and Rosemary Hollinger.
Media Enforcement Case Contact
Associate Director/Chicago Regional Counsel
CFTC Division of Enforcement (312) 596-0520
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