Release Number 7398-16
June 28, 2016
CFTC Charges Former CBOE Member Alvin Guy Wilkinson and his Connecticut-based Entities with Fraud, Misappropriation, Failing to Register with the CFTC, and Making Misrepresentations to the NFA
CFTC Alleges Wilkinson and his Partnerships, Wilkinson Financial Opportunity Fund and Chicago Index Partners, Fraudulently Solicited More than $6.9 Million from at Least 30 Investors, while Misappropriating at Least $5.2 Million of Participants’ Funds
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement Complaint in the U.S. District Court for the Northern District of Illinois, charging Alvin Guy Wilkinson, of San Juan, Puerto Rico, and his limited partnerships Chicago Index Partners, L.P. (CIP) and Wilkinson Financial Opportunity Fund, L.P. (WFOF), both located in Sharon, Connecticut, with fraud and acting as Commodity Pool Operators or Associated Persons without being registered with the CFTC, as required.
The CFTC Complaint also charges Wilkinson with providing false statements and documentation to the National Futures Association (NFA) during an NFA investigation. Wilkinson is a former member of the Chicago Board Options Exchange (CBOE), who served in leadership capacities on CBOE committees and on the CBOE’s board of directors, the Complaint states.
The Complaint, filed on June 28, 2016, alleges that, from July 1999 to the present, Wilkinson fraudulently solicited and accepted at least $6.9 million from at least 30 individuals for purchase of interests in WFOF and CIP, claiming that he would trade a portfolio of financial instruments on their behalf, including futures contracts, using a market volatility strategy. However, instead of trading participants’ monies as he represented he would, Wilkinson allegedly misappropriated at least $5.2 million, and he returned at least $1.7 million to participants of WFOF and CIP as return of capital and purported profits in the manner of a Ponzi scheme.
According to the Complaint, Wilkinson also directed his accountant to issue false Schedule K-1 Forms that misrepresented the profitability and value of participants’ interests in WFOF and CIP.
As part of his scheme, Wilkinson allegedly lied to participants about the likelihood of profit and risk of loss, and, when participants demanded to withdraw from WFOF and CIP, Wilkinson ignored their demands, engaged in delay tactics, and lied about conditions that purportedly prevented him from making disbursements. As also alleged, Wilkinson omitted to tell investors that their partnership interests had little or no value, and that he had misappropriated their investments.
Furthermore, when NFA was investigating Wilkinson in May 2016, he produced to NFA financial information for WFOF and CIP reflecting that nearly all of the funds’ assets were ultimately tied to a “Note Receivable” purportedly worth more than $12 million, although no such note exists, according to the Complaint. Accordingly, by this conduct, Wilkinson provided false, fictitious, and fraudulent statements to the NFA, the Complaint alleges.
In its continuing litigation against the Defendants, the CFTC seeks full restitution to defrauded participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against violations of federal commodities laws, as charged.
The CFTC’s Enforcement Division thanks the NFA for its assistance.
CFTC Division of Enforcement staff members responsible for this action are Heather Dasso, Michael D. Frisch, Susan Gradman, Scott R. 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.
Last Updated: June 28, 2016