Release Number 7208-15

August 5, 2015

New York Federal Court Orders New York Financial Advisor Wayne P. Weddington III and His Companies to Pay More than $1 Million for Commodity Pool Fraud and Unregistered Activity

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Colleen McMahon of the U.S. District Court for the Southern District of New York entered a Consent Order of permanent injunction against Defendants Wayne P. Weddington III of New York, New York and his companies — Brunswick Capital LLC of New Canaan, Connecticut, and Brunswick Capital Partners LP, a Delaware corporation licensed to do business in New York.

The Order, entered on August 4, 2015, requires the Defendants jointly to pay a $650,000 civil monetary penalty and restitution of $375,039 to defrauded customers. The Order also imposes a permanent trading and registration ban on the Defendants and prohibits them from further violations of the anti-fraud provisions of the Commodity Exchange Act, as charged.

The Order stems from a CFTC Complaint filed April 18, 2014 (see Press Release and Complaint 6913-14), and an Amended Complaint filed in December 2014, which together charged the Defendants with solicitation fraud, misappropriating customer funds, making false statements, and acting in unregistered capacities in connection with operating a commodity pool and a proprietary quantitative algorithm developed by the Defendants to trade E-mini S&P 500 futures contracts and other index futures.

According to the Order, 1) Defendants solicited and accepted approximately $1.35 million from pool participants, and filed a false commodity trading advisor exemption to trade the fund, 2) issued false statements and misappropriated a portion of the pool participants’ funds, 3) created false financial and trading records that purported to show that the quantitative algorithmic trading system generated monthly trading profits, when in fact, the system lost money virtually every month, and then 4) hired marketers to solicit funds from hedge funds and other institutional investors using the false trading results.

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

CFTC Division of Enforcement staff members responsible for this action are Camille M. Arnold, Allison Passman, Judith McCorkle, Melissa Glasbrenner, Joseph Konizeski, Scott Williamson, and Rosemary Hollinger.

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CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online. 

Media Contact
Dennis Holden

Last Updated: August 5, 2015