June 20, 2016
CFTC Obtains Default Judgment Orders against Three Magee Family Members of Calgary, Alberta, Canada, for Commodity Pool Fraud
Federal Court Orders Ryan, David, and Dalyne Magee to Pay More than $3.2 Million in Restitution, Disgorgement, and Civil Monetary Penalties
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Lynn Adelman of the U.S. District Court for the Eastern District of Wisconsin entered an Order of Default Judgment and Permanent Injunction against Defendants Ryan Magee, his father David Magee, and Ryan’s wife Dalyne Rae Magee, all of Calgary, Alberta, Canada, in connection with a commodity pool fraud that victimized United States and Canadian participants. The court’s Order requires the Magees jointly to disgorge USD $715,069.60 in misappropriated customer funds and Ryan Magee to pay restitution of USD $1,324,490.58. The Order also imposes a civil monetary penalty of USD $840,000 on Ryan Magee, and a civil monetary penalty of USD $140,000 each on David and Dalyne Magee. The Order also permanently bans the Magees from trading or registering with the CFTC and prohibits them from violating provisions of the Commodity Exchange Act, as charged.
The Order, entered on June 15, 2016, stems from a CFTC Complaint filed on February 18, 2016 (see CFTC Complaint and Press Release 7330-16).
A separate Order for Final Judgment, also entered on June 15, 2016, finds that, from least March 2010 to August 2013, Ryan Magee operated a fraudulent scheme that solicited at least CAD 2 million from at least 30 individuals from the U.S. and Canada to trade commodity futures and other products on participants’ behalf. The Order finds that Ryan misappropriated at least CAD 893,837 (equivalent to USD $715,069.60, the amount the Order requires the Magees jointly to disgorge) and lost at least CAD 1,360,348 trading in a brokerage account denominated in Canadian dollars, and at least USD $13,015 in two accounts denominated in U.S. dollars. According to the Order, Ryan falsely told participants, among other things, that he had achieved gains of 100-200% in prior years, and promised annual returns of 200 to 300%, when in reality he had always lost money trading. Further, the Order finds that Ryan Magee sent pool participants false account statements that reported non-existent profits. The Order further finds that David and Dalyne Magee solicited funds for the Pool and handled participant monies without being registered with the Commission.
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.
The CFTC’s Enforcement Division thanks the staff of the Alberta Securities Commission (ASC) for their significant assistance in this matter. Last year, in an enforcement action brought by the ASC, the Magees were each found liable for violating the Alberta Securities Act, and Ryan Magee was found liable for perpetrating a fraud and making misleading or untrue statements contrary to the Alberta Securities Act. The ASC is the Canadian regulatory agency responsible for administering the province of Alberta’s securities laws.
CFTC Division of Enforcement staff members responsible for this action are Melissa Cavers, Michael D. Frisch, Jon J. Kramer, David Terrell, Scott R. Williamson, and Rosemary Hollinger. The CFTC’s Enforcement Division also appreciates the assistance of the Office of Chief Counsel staff Mary Lutz and Elizabeth Padgett.
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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: December 20, 2017