Release: #3912-96 (Civ CS-96-0200-WFN)
For Release:May 16, 1996
WASHINGTON STATE COMMODITY POOL OPERATOR, KEN WILLEY,
HELD IN CONTEMPT OF COURT FOR REFUSING TO REVEAL LOCATION OF COMMODITY POOL ASSETS
Court Orders Willey Jailed After Order To Show Cause Hearing; Action Stems from CFTC Anti-Fraud Enforcement Action Against Willey Filed in April
WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced today that on May 8, 1996, U.S. District Court Judge William F. Nielsen of the U.S. District Court for the Eastern District of Washington entered an order finding Ken Willey of Twisp, Washington -- a defendant in a CFTC anti-fraud action in the same court -- in contempt of court for failing to comply with the court's April 9, 1996, order of preliminary injunction entered against Willey.
Willey Ordered Jailed Until $12 Million in Customer Funds is Accounted For
The court ordered Willey into custody until he accounts for assets totaling approximately $12 million allegedly held by Willey in a commodity pool that he operated. Willey's records reflect that he had 274 customers and that pool assets totalled $17.5 million. To date, the CFTC has frozen over $5.5 million of customer funds; the remaining funds are unaccounted for.
This matter arose from a three-count civil injunctive complaint filed by the CFTC on April 9, 1996, in the U.S. District Court for the Eastern District of Washington. (See CFTC News Release #3902-96, April 11, 1996.) The CFTC action alleges, among other things, that Willey violated the Commodity Exchange Act by acting as an unregistered commodity pool operator; engaging in a scheme to defraud pool participants by distributing false account statements to investors; receiving investor funds in a name other than that of the pool's; and commingling pool property with assets of other persons.
The CFTC is seeking a permanent injunction that would, among other things, require an accounting, disgorgement of ill-gotten gains, restitution to customers, and the payment of a civil monetary penalty of $100,000, or triple the monetary gains to the defendant, whichever is greater, for each violation.
Willey is ordered to appear back in court on June 7, 1996.
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