For Release: 4536-01
For Release June 29, 2001
CFTC FILES AND SETTLES FRAUD ACTION AGAINST COMMODITY TRADER WHO CLAIMED TO MAKE “A KILLING”
Connecticut-Based Harvey T. Gilkerson Fraudulently Solicited Commodity Investments and Misappropriated Investor Funds
WASHINGTON D.C. – The United States Commodity Futures Trading Commission (CFTC) announced today that it instituted and settled an administrative proceeding against an unregistered commodity pool operator (“CPO”), Harvey T. Gilkerson of East Haven, Connecticut. The CFTC order finds that Gilkerson fraudulently solicited investments in the two pools that he managed, BFW Enterprises and Maverick Paradox Enterprises. The Order also finds that Gilkerson misappropriated investors’ funds and distributed false account statements to investors.
Specifically, as the order finds, beginning in 1998 and continuing through 1999, Gilkerson raised $18,220 from 13 investors in his two pools, of which $16,350 has never been returned to investors. According to Gilkerson, the pools were exclusively to purchase commodity call options. The order finds that Gilkerson fraudulently solicited investments in his commodity pools with false statements claiming that he profitably traded his system for five years and that “In trying to make a living, I have made, instead, a killing!” The order finds that at the time he was soliciting investors, Gilkerson never had traded commodity options. The order further notes that Gilkerson made claims of guaranteed profits by asserting, among other things, that his system produced a “per trade return of, at least, 160% on each completed trade.” As concluded in the order, Gilkerson never disclosed that these claims were based solely on hypothetical trading.
According to the order, Gilkerson also used some investors’ funds to pay personal and business expenses, and sent false reports to investors showing profits and increasing account balances -- when Gilkerson’s actual trading on behalf of the investors resulted in losses.
The order directs Gilkerson to:
● cease and desist from further violations of the Commodity
Exchange Act and Regulations
● make full restitution to investors of $16,350 pursuant to a
payment plan
● pay a civil monetary penalty of $16,350, also pursuant to a
payment plan; and
● comply with undertakings set forth in his offer of settlement,
among which is his undertaking generally never to apply for registration
or seek exemption from registration with the Commission in any capacity
and never to engage in any activity requiring such registration or
exemption from registration.
In consenting to the entry of the order and the findings in the order, Gilkerson neither admitted nor denied the findings.
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Charles J. Sgro
Regional Counsel
CFTC Division of Enforcement
(212) 488-1249
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