Release: 4102-98 (Civ 98-C0087C)
For Release: February 5, 1998
CFTC FILES COMPLAINT AGAINST JAMES F. BONNEY OF PLOVER, WISCONSIN,
ALLEGING THAT HE COMMITTED A $540,000 COMMODITY FRAUD
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on January 29, 1998, it filed a five-count injunctive complaint against James F. Bonney of Plover, Wisconsin, in the U.S. District Court for the Western District of Wisconsin. Bonney has simultaneously consented to permanent relief enjoining him from further commodity-related activity and reserving the issue of restitution to investors until after a court-ordered accounting.
The complaint alleges that from September 1993 through June 1997, Bonney defrauded at least seven investors who had invested a total of at least $540,000 in a commodity pool Bonney operated. The complaint charges that, in operating this pool, Bonney violated the anti-fraud provisions of the Commodity Exchange Act by, among other things:
-- misappropriating funds received from investors;
-- misrepresenting to investors that their funds would be used only to trade commodity futures when they were not;
-- fraudulently guaranteeing trading profits to investors;
-- falsely representing to investors the profitability of his trading activity;
-- falsely informing investors that their funds had been frozen by the Internal Revenue Service, in order to conceal from investors that their funds were gone; and
-- issuing altered account statements to investors to misrepresent the value of pool assets.
Finally, the complaint alleges that Bonney acted as a commodity pool operator without being registered as such with the CFTC and that he illegally commingled pool assets with his own funds.
On February 2, 1998, the Honorable Barbara M. Crabb of the U.S. District Court for the Western District of Wisconsin entered a consent order of permanent injunction. The order contains detailed findings of the fraudulent activity, permanently enjoins Bonney from further violations as charged, prohibits Bonney from any futures trading and any other futures-related activity, and requires him to provide a complete accounting of his finances to the court.
Under the order, the court reserved the issues of restitution to investors and any civil penalty to be imposed until after the mandated accounting and the completion of discovery in the lawsuit. In the interim, Bonney's assets are frozen, and he is prohibited from destroying any of his books and records.