29 Jun 2016Go directly toHomeEventsJobs CFTC charges former CBOE member Alvin Guy Wilkinson with fraud Wed, 29 Jun 2016, 09:27 The US CFTC has charged former CBOE member Alvin Guy Wilkinson and his limited partnerships Chicago Index Partners (CIP) and Wilkinson Financial Opportunity Fund (WFOF) with fraud and acting as unregistered Commodity Pool Operators.ยป From Hedgeweek
Here we go again, fraud by another scammer. * solicited funds for a private placement...check. * made promises of lofty returns...check. * misappropriated funds for his own benefit...check. * falsified accounting statements...check. * eventually got busted by the regulators...check. http://www.cftc.gov/idc/groups/publ...legalpleading/enfwilkinsoncomplaint062816.pdf Complaint, at paragraph 45, incredible! "A bank account statement for WFOF's account at BMO Harris Bank (xxxxxx6506) reflected a balance of $995 on December 31, 2004."
It seems some wealthy investors are either very gullible, greedy, and/or simply don't have the skills to conduct proper DUE DILIGENCE when being solicited for funds. It is FALSE to believe these guys all have "advisors who invest for them" because any COMPETENT advisor would have seen right through this guy's b.s., such as follows: Complaint at paragraph 50: "One participant located in this District invested $775,000 in CIP in November 2011 after Wilkinson told him he was running a profitable hedge fund that would produce 20-30% returns through trading." You're just going to had over $775k to a guy who tells you he's running a profitable fund without any PROOF? Complaint at paragraph 51: "Similarly, the participant located in New York invested $275,000 in February 2011 after Wilkinson guaranteed him returns of at least 10%, with returns up to 30% per year possible." Again, proper due diligence suggests it's a total red flag when a person makes guarantees on any investment. Also, any financial advisor or commodity pool operator who claims trading stocks, options and futures are a "no risk" investment is blatantly LYING, but this is exactly what he was repeatedly telling his clients. Only U.S. government bond or a CD is deemed "risk free" but only to the extent you'll get your money back. It still doesn't mean you'll get a return on your money due to inflation (i.e. loss of purchasing power of the dollar during the term of the investment). By the time investors finally started demanding their money and the NFA began its examination, it was too late. The money was GONE BABY GONE, lol!
Chief trial attorney Susan Gradman of CFTC, states in the following in the request for relief: "An order requiring Defendants to make restitution by making whole each and every pool participant whose funds were received or utilized by them in violation of the provisions of the Act as described here in, including pre-judgment interest." Ya, good luck with getting that from Wilkinson who showed $995 in his bank account! When Team Trading folded, approximately 200 traders were collectively owed roughly $2 million. Most balances were small, less than $5,000 per trader. The SEC didn't do JACK! And except for the handful of traders who caused enough of a stir to get paid back by one of the owners, the rest didn't get back a dime. Some had balances owed upwards of $50k. Let's see if the CFTC actually gets any money for the investors who got screwed. As is often the outcome in these scams, Wilkinson will settle without admitting or denying the charges, monetary restitution will be slim to none, and the CFTC/NFA will simply move on to the next case. Given he sent out fake K-1 statements to clients, there could be a federal case made against him for mail fraud, depending on whether or not the U.S. Attorney will want to prosecute. Sooner or later, karma's a bitch.
No, you may get to settle without admitting charges on something like front-running customers orders, but there aren't any cases of this magnitude where CFTC has accepted it. You're right that they probably won't recover any money. Can't squeeze blood from a turnip and this guy wouldn't have resorted to what he did if he had any legitimate money or a way to make it.
I see your point. In other cases I've read on the SEC.gov site, they've accepted settlements without acknowledgement of guilt by the defendant. This case is quite different and more involved, since it has more egregious allegations such as fabrication of K-1 statements, failing to comply with requests by auditors, and outright fraud.