For Release: September 14, 2006
U.S. Commodity Futures Trading Commission Charges Texas Man and His Company With Defrauding Customers of $4.5 Million
Carl W. King and Carl W. King Investments, LLP Defrauded Customers and Issued False Account Statements
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a civil action on August 30, 2006, in the United States District Court for the Northern District of Texas, against Carl W. King of Dallas and his company, Carl W. King Investments, LLP (King Investments) for fraud and the issuance of false reports to customers.
The CFTC complaint alleges that since 1995 and continuing through February 2003, King, individually and as the agent of King Investments, engaged in a scheme to defraud customers of more than $4.5 million. King allegedly told potential customers that King Investments managed over $15 million in assets for customers with which he traded commodity futures contracts on their behalf. King purportedly informed customers that he achieved positive returns on his trading which, at times, yielded profits in excess of 20%.
As alleged in the complaint, the defendants accepted money from individual customers and placed the money in an account in the name of King Investments (the Corporate Account). After receiving money from individual customers, the complaint alleges that the defendants did not invest the money in commodity futures trading, but left the money in the Corporate Account where King could access it for his personal use on items including his home mortgage and health care expenses.
The complaint further alleges that the defendants concealed the misappropriation of customer finds by issuing customers false statements showing profits and making purported profit payments from other customers’ investments.
In a related criminal action, King pled guilty in the United States District Court for the Eastern District of Texas to one count of mail fraud as a result of his fraudulent activities. King is currently serving an 87 month prison term in Federal prison.
The CFTC wishes to thank the United States Securities and Exchange Commission, the Texas State Securities Board, and the United States Attorney’s Office for the Eastern District of Texas for their cooperation in this matter.
The following Division of Enforcement staff was responsible for this case: Timothy J. Mulreany, David Reed, Mary Kaminski, Paul Hayeck, and Joan Manley.
Last Updated: April 8, 2007