For Release: January 24, 2008
CFTC Sanctions Virginia Commodity Pool Operator $739,000 to Settle Fraud and Misappropriation Charges
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today settled its charges of fraud and misappropriation of customer funds against Robert Lee Roane of Chester, Virginia, and sanctioned him a total of $739,000.
The CFTC issued an order on January 24, 2008, which finds that, since the fall of 2005 and continuing through 2006, Roane solicited the public to invest approximately $780,000 in a commodity pool by, among other things, falsely representing his past success as a futures trader and claiming to have a foolproof system. To the contrary, his past trading of commodity futures had not been successful.
The order finds that Roane, in his handling of pool participants’ funds, lost the majority of the funds in trading and misappropriated approximately $166,500, of which he used $137,900 to pay for personal expenses and the remaining $28,600 he used to repay other participants.
The order also finds that Roane violated the Commodity Exchange Act and CFTC regulations by acting as an unregistered commodity pool operator and defrauding pool participants. The order also finds that Roane committed further violations in his operation of the commodity pool, including failing to operate the pool as a separate legal entity, accepting funds for the pool in other than the pool’s name, commingling pool funds with his own, and failing to provide disclosure documents to pool participants.
Roane is required to pay approximately $609,000 in restitution to defrauded pool participants and a $130,000 civil monetary penalty. The order also imposes a permanent trading ban on Roane and permanently prohibits him from applying for registration with the CFTC.
The CFTC’s Enforcement Division appreciates the assistance of the Richmond Division of the Federal Bureau of Investigation in this matter.
The following CFTC Division of Enforcement staff were responsible for this case: Kara Mucha, James A. Garcia, Joseph F. Vargyas, Michael Solinsky, Gretchen L. Lowe, and Vincent A. McGonagle.
Last Updated: January 24, 2008