May 25, 2016
Federal Court Orders California Resident David Bryant to Pay More than $6 Million in Restitution and Penalties for Fraud and Misappropriation
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that the Honorable Edmond E. Chang of the U.S. District Court for the Northern District of Illinois entered a Consent Order for permanent injunction against David Bryant of Los Angeles County, California. The Order requires Bryant to pay a $3 million civil monetary penalty and $3,087,343 in restitution. The Order also imposes permanent trading and registration bans on Bryant, and prohibits him from committing further violations of the anti-fraud and registration provisions of the Commodity Exchange Act, as charged.
The Order arises out of a CFTC Complaint filed on December 2, 2015, charging Bryant with fraudulent solicitation, sending false statements to pool participants, and acting as a Commodity Pool Operator (CPO) without being registered with the CFTC, as required (see CFTC Complaint and Press Release 7287-15, December 4, 2015).
According to the Order, between at least June 2014 and December 2015, Bryant solicited at least $4,644,785 from multiple individuals, many of them family and friends, by representing that their funds would be traded as a pool in commodity futures. Bryant deposited these funds into various accounts that he controlled, where the funds were comingled with his personal funds.
Bryant failed to disclose to pool participants that he lost approximately $2,661,080 of their funds trading commodity futures in his personal trading accounts and failed to disclose to pool participants that he was trading their funds in his own personal trading accounts, the Order finds. To hide his trading losses, he emailed several pool participants statements that falsely reported that the value of each individual’s original investment had increased, according to the Order.
The Order further finds that Bryant returned approximately $1,630,942 million to pool participants, but he failed to return the approximately $3,087,343 million in remaining funds that he received from pool participants. Bryant lost these funds trading futures or misappropriated them for his own personal expenses, according to the Order.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this action are Stephanie Reinhart, David Terrell, Joseph Patrick, Scott Williamson, and Rosemary Hollinger.
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CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: May 25, 2016