Release Number 8554-22
Federal Court Orders Texas Unregistered Commodity Pool Operator to Pay More Than $13 Million for Commodity Fraud
July 07, 2022
Washington, D.C. — The Commodity Futures Trading Commission today announced the U.S. District Court for the Western District of Texas entered a consent order on July 6, imposing monetary sanctions against David Seibert, most recently of Lakeway, Texas.
The order resolves a CFTC action filed on September 10, 2020, and follows a September 15, 2020 order in which the court found Seibert liable for solicitation fraud and the misappropriation of client funds. The court also permanently prohibited him from further violations of the Commodity Exchange Act, as charged, and imposed permanent registration and trading bans. [See CFTC Press Release No. 8245-20]. Today’s order requires Seibert to pay $10,794,508 in restitution to victims of his scheme and to pay a $2,278,853 civil monetary penalty.
As the court previously found, from March 2016 through April 2019, Seibert fraudulently solicited and accepted more than $10 million from 11 participants. At the time, Seibert claimed that he would use participant funds for short-term, high-interest, secured “bridge loans” made to third-party borrowers who purportedly would use the loaned funds to make property repairs as they sought permanent financing. Seibert told participants that he would find the lending opportunities, complete the due diligence to confirm that the borrower was qualified, and handle the closing and servicing of the loan. However, Seibert did not originate any loans. Seibert instead pooled and used most of the funds to trade commodity interests in his personal trading account, where he lost more than $8.3 million trading. He used other participant funds for personal expenditures.
Parallel Criminal Action
In a separate action, the U.S. Attorney’s Office for the Western District of Texas filed a criminal complaint against Seibert on June 3, 2021, charging him with two counts of wire fraud and engaging in monetary transactions in property derived from unlawful activity. United States v. David Byron Seibert, No. 1:21-CR-00104-RP (W. D. Texas). Seibert pled guilty and was sentenced on December 7, 2021 to 70 months of incarceration and three additional years of supervised release. He was also ordered to pay restitution of $10,794,508 and was subject to a criminal forfeiture.
The Division of Enforcement staff members responsible for this action are Heather Dasso, Susan B. Padove, David Terrell, Scott R. Williamson, and Robert T. Howell.