The U.S. Commodity Futures Trading Commission is charging TC Credit Service, LLC, doing business as Del-Mair Group, LLC), and its owner Christopher D. Daley with Texas securities fraud. In its anti-fraud enforcement action, the CFTC is accusing them of running a $.1.4 million commodity pool scheme.
According to the CFTC, beginning at least as early as the start of 2010 and up until at least November 2011, the defendants fraudulently accepted and solicited at least $1.4 million from at least 55 participants who became involved in a commodity pool for trading crude oil futures contracts. However, alleges the agency, TC Credit Services wasn’t maintaining any commodity accounts under its name during this time, while Daley’s personal trading accounts were suffering net losses monthly.
The Texas securities complaint accuses Daley of omitting material fact, giving pool participants fake account statements to hide the fraud, and making fraudulent misrepresentations that: his trading in crude oil futures contracts would make 20% monthly returns on deposits, the pool never experienced a month of losses, and its value had grown 60% for the year starting March 2011. Daley also allegedly omitted that the pool did not keep any commodity interest account under its name, his personal futures trading accounts lost money each month, and he was not a properly registered Commodity Pool Operator with the agency.
The CFTC claims that Dailey used just a part of the participants’ money to trade futures contracts while he misappropriated the rest of the cash, including at least $100,000 to cover his own expenses and about $195,000 toward his own bank accounts.
One day after the agency submitted its complaint to the U.S. District Court for the Southern District of Texas, Judge Lynn N. Hughes issued an emergency order freezing the defendants assets and barring them from destroying records and books. The CFTC wants restitution for the defrauded pool participants and for the defendants to pay civil penalties and give back ill-gotten gains. It also wants registration and trading bans and permanent injunctions against future federal commodities laws violations.
Commodity Pool Fraud
These scams usual involve unregistered commodity pool operators that promise investors big profits with low risks. These fraudsters will usually capitalize on their personal relationships or reputations to get people to invest. Unfortunately, every year, investors end up losing millions of dollar in commodity pool scams and fake “hedge funds” that trade in commodity futures and options.
Read the Complaint (PDF)
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Texas Securities Roundup: Morgan Stanley Smith Barney Sued Over Financial Adviser’s Ponzi Scam, Judge Dismisses Ex-GE Executive Whistleblower’s Lawsuit Over His Firing, & Ex-Stanford Financial Group CIO Pleads Guilty to Obstructing the SEC’s Probe, Stockbroker Fraud Blog, July 3, 2012
Ponzi Scam Receiver Can Go Forward with Securities Claim Against Texas Investor Who Benefited From the Fraud, Stockbroker Fraud Blog, June 26, 2012
At Shepherd Smith Edwards and Kantas, our Texas commodity pool fraud attorneys represent investors that have suffered losses and are seeking to recover their lost funds. We know how upsetting it can be to lose your savings because you trusted a professional and/or a friend.