Release Number 7447-16
September 20, 2016
CFTC Orders Raja Michael Mawad and His Texas-Based Company, RNS Holdings LP, to Pay a Civil Monetary and Restitution Totaling More than $389,000 for Fraud and Failure to File Required Annual Reports
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against Respondents Raja Michael Mawad, who resided in Houston, Texas during the relevant period (from in or about 2009 to at least early 2015) and the company he founded, owned, and ran, RNS Holdings LP, a Texas corporation headquartered in Houston, Texas, charging them with engaging in acts or practices which operated as a fraud upon participants in a commodity pool they operated and failing to distribute to participants and submit to the National Futures Association (NFA) the Annual Reports required of a CFTC-registered Commodity Pool Operator (CPO).
The CFTC Order requires Respondents, jointly and severally, to pay a $200,000 civil monetary penalty, as well as restitution of $189,032.72 to defrauded customers, offset (dollar for dollar) by all moneys already distributed by the NFA as restitution in connection with a prior, related NFA action (NFA Case No.15-BCC-021). The Order also imposes permanent registration bans on the Respondents and requires them to cease and desist from further violations of the Commodity Exchange Act and a CFTC regulation, as charged.
According to the CFTC Order, from in or about 2009 to at least early 2015, Respondents withdrew or caused to be withdrawn a total of $189,032.72 from the pool they operated for unauthorized personal expenses, travel and meal expenses, salary and payroll tax expenses, and expenses of a separate pool operated by Mawad. None of these uses was disclosed to pool participants or potential participants. Further, after RNS Holdings was required to register with the CFTC as a CPO in December 2012, Respondents failed to submit to the NFA or distribute to participants any of the Annual Reports required of a registered CPO.
The CFTC thanks the NFA for its assistance.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any 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 Gabriella Geanuleas, Joseph Muoio (previously on detail from the U.S. Department of Justice, Antitrust Division), Alben Weinstein, K. Brent Tomer, Lenel Hickson, Jr., and Manal M. Sultan.
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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: September 20, 2016