CFTC News Release: 4349-99 (CFTC Docket No. 00-02)
For Release: December 20, 1999
CFTC FILES AND SETTLES ACTION AGAINST GEORGE W. VELISSARIS FOR COMMODITY POOL FRAUD
CFTC Finds that Velissaris Defrauded Investors by Misappropriating Commodity Pool Funds and Misrepresenting the Profitability of the Commodity Pools, and Orders Restitution to Defrauded Investors, Among Other Sanctions
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it issued an order on December 16, 1999, instituting administrative proceedings against and simultaneously accepting an offer of settlement from George W. Velissaris, of Northbrook, Illinois. Velissaris was registered as an associated person of Paine Webber Inc., from April 1985 until February 1989, but has not been registered with the CFTC in any capacity since that time.
The CFTC order finds that Velissaris violated the anti-fraud provisions of the Commodity Exchange Act (CEA) (sections 4b(a)(i)-(iii), 4o(1)) by making misrepresentations about the profitability of his commodity pools when soliciting investors, misappropriating investor funds, and issuing statements to investors that falsely represented that the commodity pools were profitable.
The CFTC's order finds that Velissaris was the sole managing partner of ACG Partners, L.P. (ACG), and that, as such, he fraudulently operated two successive commodity pools, ACG I and ACG II, from March 1996 through July 1998. The order specifically finds that Velissaris fraudulently solicited and accepted at least $323,000 from investors in ACG I, lost approximately $61,000 trading commodity futures, misappropriated at least $99,000, repaid three ACG I investors using, in part, funds he solicited from investors in ACG II, and issued false statements to pool participants.
The CFTC's order also finds that Velissaris violated CFTC regulation 4.20(c) by withdrawing $82,000 from ACG's checking account and transferring those funds to his personal account, thus commingling the property of the two pools he operated with his own funds.
Without admitting or denying the CFTC's findings, Velissaris consented to the entry of the order that:
-- directs him to cease and desist from violating the provisions of the CEA and CFTC regulations with which he was charged;
-- permanently prohibits him from trading on contract markets;
-- orders him to pay $103,662.93 as restitution, plus interest, to defrauded investors, pursuant to a five-year payment plan;
-- requires him to liquidate all futures and options positions held by him or on his behalf, or in which he has any beneficial interest; and
-- requires him to comply with his undertakings, including that he never seek registration or exemption from registration in any capacity with the CFTC, and never engage in any activity requiring registration or exemption from registration.
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