Release Number 7232-15
September 17, 2015
CFTC Orders Indiana Resident Terry Lee Phillips and his Two Companies to Pay Restitution and a Civil Monetary Penalty Totaling More than $234,000 for Fraud and Misappropriation
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against Terry Lee Phillips of Indianapolis, Indiana, and his two companies, Phillips Investment & Trust LLC and Corporate I Communications & Technology Inc. (the Respondents), charging them with defrauding investors who provided funds to Phillips to trade commodity futures in a designated contract market. In addition, none of the Respondents has ever been registered with the CFTC, as required.
The CFTC Order requires the Respondents jointly to pay restitution to defrauded investors totaling $94,500 and a $140,000 civil monetary penalty. The Order further imposes permanent registration bans on all Respondents, permanent trading bans on the two business-entity Respondents, and a five-year trading ban on Phillips. Respondents are also required to cease and desist from further violations of the Commodity Exchange Act, as charged.
The Order finds that from at least 2011 through 2014, the Respondents fraudulently obtained at least $113,400 from 13 individuals and entity investors to trade commodity futures. The Order also finds that Respondents misappropriated a large portion of investors’ funds for Phillips’ personal use, and misrepresented to investors — through fictitious account statements and otherwise — that Phillips was achieving enormous profits trading on their behalf, when in fact he was either using their funds to trade the E-Mini Dow Futures contract for significant losses or else not trading at all. Despite many inquiries by investors and demands for repayment, most of the funds Respondents illegally obtained from their investors — at least $94,500 — have not been returned to investors, the Order finds.
The CFTC thanks and acknowledges the assistance of the Securities Division of the Office of the Indiana Secretary of State.
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 case are David C. Newman, W. Derek Shakabpa, Trevor Kokal, K. Brent Tomer, Lenel Hickson, Jr., and Manal M. Sultan.
Last Updated: September 17, 2015