Release: 4709-02
For Release: October 8, 2002


Defendants in CFTC Case Used Approximately $1 Million of Customer Funds to Pay Personal Expenses

WASHINGTON, D.C.- The U.S. Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the Middle District of Florida issued a consent order of permanent injunction against defendant Ted E. Whidden, of Fort Myers, Florida. The consent order, entered on September 27, 2002, arises out of a complaint filed by the CFTC on March 7, 2002, which charged that defendants Thomas D. Chilcott, Leona Westbrook, and Ted E. Whidden, among other things, defrauded at least 45 commodity pool investors (see CFTC News Release 4615-02, March 11, 2002).

Specifically, the CFTC complaint alleges that Chilcott and Whidden solicited at least $2.5 million from customers for the purpose of investing in a commodity pool, and that Chilcott and Whidden misrepresented to pool participants and prospective participants that the pool was trading profitably and the value of the participants’ shares in the pool was increasing, when, in fact, during the course of the pool’s operation, it lost approximately $300,000 from trading. The complaint also alleges that Chilcott, Westbrook, and Whidden misappropriated at least $1 million of pool funds to pay their personal expenses.

The complaint further alleges that, in soliciting customers either to open individual trading accounts or to invest in the pool, all of which were to be traded by Chilcott, Chilcott and Whidden never informed the prospective investors that a federal district court had permanently barred Chilcott from soliciting or trading any customer commodity accounts.
The court order enjoins Whidden from further violations of the Commodity Exchange Act and aiding and abetting violations of a prior district court order issued against Chilcott by the U.S. District Court in Denver, Colorado (Commodity Futures Trading Commission v. Chilcott Portfolio Mgmt, Inc., et. al., Civil Action No. 81-F-999, Order No. 1981-9, (D. Colo. July 10, 1981). In addition, the order permanently prohibits Whidden from trading commodity futures contracts or options on commodity futures contracts, from seeking registration or exemption from registration with the CFTC, and from acting in any capacity requiring CFTC registration or exemption from registration.

The order also requires Whidden to pay restitution and a civil monetary penalty in an amount to be determined either by settlement within 90 days of the entry of the order, or by a court hearing to be scheduled upon the expiration of the 90 days.

Previously, on July 18, 2002, the court issued a consent order of permanent injunction as to defendants Thomas D. Chilcott and Leona Westbrook. (see CFTC News Release 4679-02, July 25, 2002).

(For more information on commodity pool fraud, see the CFTC’s Consumer Advisory-Alert: Beware of Commodity Pool Investment Opportunities Promising Large Profits and Little Risk, Even When Offered by Persons You Know, February 26, 2002.)

The following Division of Enforcement staff are responsible for this case: Richard Glaser, Eugene Smith, Grant Collins, and Kay Majors-Guy.

A copy of the CFTC complaint and consent order may be obtained at

Media Enforcement Contact:

Richard Glaser
Acting Associate Director
CFTC Division of Enforcement
(202) 418-5358

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