November 26, 2013
Federal Court in Connecticut Orders Feisal Sharif to Pay over $3 Million to Settle Fraud Charges in CFTC Action
In a related criminal action, Sharif pled guilty to criminal violations of the Commodity Exchange Act
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court Order against defendant Feisal Sharif of Branford, Connecticut, requiring him to pay restitution of $2,230,000 to defrauded customers and a $900,000 civil monetary penalty, as well as permanent trading and registration bans against Sharif for violations of the Commodity Exchange Act (CEA).
The Order, entered on November 21, 2013, by the Honorable Stefan R. Underhill of the U.S. District Court for the District of Connecticut, stems from a CFTC Complaint filed on November 26, 2012, charging Sharif with fraudulent solicitation, misappropriation, and registration violations (see CFTC Press Release 6424-12).
The Order finds that, between January 2007 and September 2012, Sharif, by and through the commodity pool First Financial LLC, fraudulently solicited and accepted over $5.4 million from at least 50 members of the general public to trade commodity futures contracts through a pool. The Order further finds that Sharif traded only a portion of the pool participant funds in proprietary accounts and sustained overall and significant losses. Sharif misappropriated the majority of the pool participant funds to make so-called returns to participants in payments that he claimed were the profitable proceeds of their trading, the Order finds. Sharif also misappropriated pool participant funds for personal use, according to the Order.
Sharif concealed his fraud and trading losses from pool participants by issuing false account statements reflecting profits, the Order finds. Sharif also made excuses regarding the safety of pool participants’ investments.
The Order also finds that Sharif failed to register with the CFTC as a Commodity Pool Operator as required by the CEA.
In a related criminal action, Sharif pled guilty to criminal violations of the CEA. Sharif is scheduled to be sentenced in January 2014 (see USA v. Sharif No. 3:13-cr-00172-SRU-1).
The CFTC thanks the Securities and Business Investments Division of the State of Connecticut Department of Banking, the Federal Bureau of Investigation, and the U.S. Attorney’s Office for the District of Connecticut for their assistance.
CFTC Division of Enforcement staff members responsible for this case are Amanda Harding, James Deacon, Jessica Harris, Kenneth McCracken, Rick Glaser, and Richard Wagner.
Last Updated: November 26, 2013