CFTC Fines Iowa Trader $2.1 Million over Commodity Fraud

A New York court has granted the US Commodity Futures Trading Commission’s motion for a default judgment against a commodity trading firm run by an Iowa-based money manager ‎accused of soliciting clients for his fraudulent scheme via Craigslist ads.‎

The agency today said Lon Olen Friedrichsen had been ordered to pay nearly $1.5 million in penalties and additional $600,000 in restitution for illegal, off-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Oil futures transactions and registration violations.

The orders also imposed lifetime trading, solicitation and registration bans against Friedrichsen and “permanently enjoins him from future violations of the Commodity Exchange Act and CFTC Regulations,” the CFTC said.

Clients gave Friedrichsen the power to trade in their accounts as he ‎fraudulently induced them claiming to be fit and proper. One client gave him ‎‎$100,000 as he claimed to Yield Yield A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a Read this Term 10 percent per day in returns provided that they would ‎split the profits 50/50 every week.

The CFTC said that, beginning in December 2014 and continuing through ‎to May 2017, the defendant conspired to defraud investors by enticing them ‎to participate in his asset management services.‎

As a result, at least 41 participants gave Friedrichsen a total of $591,570 to trade in their personal commodity futures accounts held at ‎Futures Commission Merchants. He lost most of his clients’ ‎funds and raked in a total of $45,369 in fees.‎

In connection with the promotion of his service, ‎the unregulated money manager made a ‎series of materially false claims through various ‎means, including a website, social media, newsletters ‎, and verbal communications.‎ He also allegedly utilized promotional materials that ‎showed trading returns based on hypothetical results, ‎without including the required disclosure language.‎

The order also finds that the company accepted clients’ trades and funds and therefore acted as Eligible Contract Participants (ECPs), without registering as such with the CFTC.