July 26, 2010
CFTC Charges Illinois Resident Joseph A. Dawson and His Company, Dawson Trading LLC, with Commodity Pool Fraud
The defendants allegedly stole more than $2 million from pool participants and lost nearly $1 million trading.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it charged Joseph A. Dawson of Fox Lake, Ill. and his company, Dawson Trading LLC, based in McHenry, Ill., with fraud involving a commodity pool.
The CFTC complaint, filed in the U.S. District Court for the Northern District of Illinois on July 20, 2010, charges that Dawson and Dawson Trading misappropriated more than $2 million of pool participant funds for personal use between February 2005 and December 2009. The defendants allegedly used the misappropriated funds for various purchases and personal expenses, including to make a down payment on a personal residence and mortgage payments. In addition, the defendants allegedly used customer funds to install an in-ground swimming pool and for landscaping, furniture, car payments, restaurant bills and movie tickets.
Dawson and Dawson Trading fraudulently solicited pool participants by claiming to be successful traders when, in fact, the defendants lost nearly $1 million trading commodity futures and securities between July 2005 and December 2009. The complaint also alleges that defendants sent pool participants account statements that misrepresented the profitability of their accounts. In one instance, Dawson allegedly represented that a pool participant’s quarterly trading gain for the second quarter of 2007 was nearly $100,000; however, the defendants lost approximately $453,808 trading during that quarter.
The CFTC also charged Dawson Trading with failing to register with the CFTC as a commodity pool operator and charged Dawson with failing to register as an associated person of a commodity pool operator in violation of CFTC regulations.
The CFTC in its continuing litigation seeks disgorgement of ill-gotten gains, civil monetary penalties and injunctions against further violations of the Commodity Exchange Act and CFTC regulations.
Criminal complaint filed in this action
On December 17, 2009, a criminal complaint was filed against Dawson in the U.S. District Court for the Northern District of Illinois in connection with this scheme.
The CFTC thanks the U.S. Attorney’s Office for the Northern District of Illinois, the Federal Bureau of Investigation and the Securities and Exchange Commission for their assistance in this action.
The following CFTC Division of Enforcement staff are responsible for this action: Stephanie Reinhart, William Janulis, Ken Hampton, Scott Williamson, Rosemary Hollinger and Richard Wagner.
Last Updated: July 26, 2010