Release Number 7360-16
April 12, 2016
CFTC Permanently Bans Brian Hinman from Trading and Registering with the CFTC and Imposes over $141,000 in a Monetary Penalty and Disgorgement for Aiding and Abetting Commodity Pool Fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against Brian Hinman for aiding and abetting Kevin G. White’s Texas-based entities’, RFF GP, LLC and KGW Capital Management, LLC, fraudulent solicitation of participants in a foreign currency exchange pool named Revelation Forex Fund, LP.
The CFTC filed a federal court action against White and the White entities on July 9, 2013, for their fraudulent scheme (see CFTC Press Release 6644-13, July 12, 2013) and subsequently entered into a Consent Order for permanent injunction against them (see CFTC Press Release 7151-15, April 6, 2015). White and his entities were subject to a $3,365,888 restitution order and a $4,150,000 civil monetary penalty. In a related criminal action, White was sentenced to over eight years of prison for mail fraud (see CFTC Press Release 7127-15, February 26, 2015).
According to the CFTC’s Order, from July 2011 to August 2011, Hinman aided and abetted White’s and the White entities’ fraudulent solicitation of pool participants through his contributions to a fraudulent mass solicitation email sent by White to prospective pool participants. In May 2012, Hinman further aided and abetted White’s fraudulent solicitation of pool participants by soliciting a pool participant to invest in RFF, which was operated by White.
As stated in the Order, Hinman cooperated fully with the CFTC’s investigation.
The CFTC Order requires Hinman to pay a civil monetary penalty of $140,000 and disgorge $1,138.12 in compensation that he was paid by White. The Order also permanently bans Hinman from registering with the CFTC and engaging in any commodity-related activity.
The CFTC appreciates the assistance of the U.S. Securities and Exchange Commission’s Fort Worth, Texas, regional office in this matter.
The CFTC Division of Enforcement staff members responsible for this case are Harry E. Wedewer, Dmitriy Vilenskiy, John Einstman, and Paul G. Hayeck.
* * * * * *
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: April 12, 2016