For Release: August 10, 1999
CFTC FILES ENFORCEMENT ACTION ALLEGING COMMODITY FUTURES AND OPTIONS FRAUD AGAINST MAX E. WALTERS
Walters Allegedly Defrauded Limited Partnership And Limited
Partner Out Of $1 Million By Making Misrepresentations Concerning Profits
And Misappropriating Funds
WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced today that it has filed an administrative complaint against Max E. Walters of Kansas City, Missouri, alleging that Walters, a general partner in a limited partnership, defrauded the limited partnership and the limited partner out of more than $1 million in connection with commodity futures and options trading.
The CFTC's complaint against Walters alleges that from August 1993 through October 1996, Walters violated the anti-fraud provisions of the Commodity Exchange Act (CEA) and CFTC Regulations. Specifically, the complaint alleges that Walters violated Sections 4b(a)(i), 4b(a)(ii), 4b(a)(iii) and 4c(b) of the CEA and Regulation 33.10(a), by, among other things, misrepresenting, orally and in writing, to the limited partner that the limited partnership was earning constant trading profits that eventually exceeded $945,000 when, in fact, it was accumulating trading losses that exceeded $800,000 by September 1996, and by misappropriating limited partnership funds for his own personal trading and other personal uses.
A public hearing has been ordered to determine whether the allegations of the complaint against Walters are true and, if so, what sanctions, if any, should be imposed. Possible sanctions include a cease and desist order, a civil monetary penalty, a trading prohibition and restitution.