Release: 4329-99 (98 Civ-0087C)
For Release: October 27, 1999
WISCONSIN FEDERAL COURT ENTERS CONSENT ORDER OF RESTITUTION AGAINST JAMES F. BONNEY OF PLOVER, WISCONSIN, IN COMMODITY POOL FRAUD CASE FILED IN 1998
Court Orders Bonney to Pay Over $300,000 in Restitution to Defrauded Customers
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that Judge Barbara B. Crabb of the U.S. District Court for the Western District of Wisconsin entered a supplemental consent order concerning restitution, disgorgement, and a civil monetary penalty requiring James F. Bonney of Plover, Wisconsin, to pay restitution of $315,101 to 13 investors under a five-year payment plan.
Judge Crabb previously entered a consent order of permanent injunction on February 2, 1998, permanently enjoining Bonney from violating the anti-fraud and registration provisions of the Commodity Exchange Act (CEA) and mishandling customer funds in violation of CFTC regulations in the operation of a commodity pool. The consent order of permanent injunction was entered on February 2, 1998, (see CFTC News Release 4102-98, February 5, 1998) and, like the court's supplemental order entered on October 22, 1999, stems from a five-count CFTC complaint filed on January 29, 1998, charging that Bonney violated the anti-fraud provisions of the CEA.
Specifically, the CFTC's complaint alleged that in operating the commodity pool, from September 1993 through June 1997, Bonney cheated and defrauded investors by, among other things:
-- misappropriating funds from investors; misrepresenting to investors that their funds would be used to trade commodity futures, when they were not;
-- fraudulently guaranteeing trading profits to investors; falsely representing to investors, both verbally and in fraudulent account statements, that his futures trading was profitable;
-- falsely representing to investors that pool funds had been frozen by the Internal Revenue Service; and
-- commingling investor funds with his own personal funds.
The complaint also charged Bonney with operating a commodity pool without being registered with the CFTC as a commodity pool operator.
In the February, 1998, consent order of permanent injunction, the terms of which still remain in effect, Bonney admitted the CFTC's allegations and agreed to be permanently enjoined from violating the following provisions of the CEA and CFTC regulations: sections 4b(a)(i), 4b(a)(ii) and 4o(1) of the CEA (anti-fraud provisions); section 4m(1) of the CEA (requirement that commodity pool operators and commodity trading advisors register with the CFTC); and regulation 4.20(a), (b) and (c) (requirement that a pool operate as a separate legal entity and prohibition against commingling customer funds with funds of the commodity pool operator).
In addition, Bonney consented to being permanently banned from seeking registration with the CFTC or acting in any capacity that requires registration or exemption from registration, and to a permanent prohibition on trading commodity futures for himself or others, or otherwise engaging in any business activities relating to commodity futures trading.
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