Release Number 7350-16
March 31, 2016
CFTC Charges Georgia Resident Hendrik A. Van Beuningen and His Company, DeBrink Trading Fund I, LLC, with Fraud, Misappropriation, and Registration Violations in Connection with Their Commodity Pool
Defendants Solicited More than $500,000 from Pool Participants and Fabricated Futures Commission Merchant Statements to Conceal Their Fraud
Court Order Freezes Defendants’ Assets and Protects Records
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Northern District of Georgia, charging Defendants Hendrik A. Van Beuningen of Brookhaven, Georgia, and his company, DeBrink Trading Fund I, LLC (DeBrink) of Atlanta, Georgia, with fraud, misappropriation, and issuing false statements in connection with a commodity pool they operated.
The CFTC Complaint, filed under seal on March 28, 2016, alleges that, from at least January 2014 to at least January 2016, the Defendants fraudulently solicited and accepted at least $505,000 from at least five members of the public for the purported purpose of pooling funds to trade various futures contracts. The CFTC’s Complaint also charges the Defendants with registration violations concerning their commodity pool.
Asset Freeze Order
On March 29, 2016, U.S. District Judge Timothy C. Batten, Sr. entered a Statutory Restraining Order freezing the Defendants’ assets, prohibiting the Defendants from destroying their records, and granting the CFTC immediate access to those records.
Trading Losses and Misappropriation
Defendants allegedly transferred only approximately 45 percent of the pool participants’ $505,000 to a trading account in the name of the commodity pool at a Futures Commission Merchant (FCM). The Defendants’ overall trading of the pool funds was never profitable, with nearly all of the pool money lost by September 30, 2015, per the CFTC’s Complaint. Additionally, the Defendants are charged with misappropriating pool participants’ funds, including all $140,000 in pool participant funds received from November 2015 to January 2016, none of which ever made it into an FCM account in the name of the pool.
False Account Statements
According to the Complaint, despite their trading losses, the Defendants fraudulently touted to pool participants on DeBrink’s website a trading return of 19.14 percent for 2014 and a cumulative return of 31.77 percent through September 2015 and provided pool participants with false account statements that misrepresented the pool’s profitability and the value of each participant’s interest in the pool. Further, the Defendants’ false account statements referenced management fees that were far in excess of the amounts to which the Defendants were entitled under agreements with pool participants, according to the Complaint. In an effort to cover up their fraud, the Defendants allegedly provided DeBrink’s FCM fabricated account statements that purportedly showed funds at another FCM.
In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and injunctions against further violations of the federal commodities laws, as charged.
The CFTC thanks the National Futures Association, the U.S. Attorney’s Office for the Northern District of Georgia, and the Brookhaven Police Department for their assistance.
CFTC Division of Enforcement staff members responsible for this action are Jenny Chapin, Lauren Fulks, Mary Lutz, Nate Gueltzau, Joyce Brandt, Jeff Le Riche, and Charles D. Marvine, as well as Jeremy Christianson and Sarah Wood from the CFTC’s Office of Data and Technology.
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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.
Last Updated: March 31, 2016