The Commodity and Futures Trading Commission has filed and settled changes against Sharief Deona McDowell, a California resident, for fraud in connection with options on commodity futures contracts and for failing to register as a commodity trading advisor (CTA).
The US watchdog requires McDowell to pay $2.37 million in restitution and the same amount in a civil monetary penalty.
According to the announcement, McDowell engaged in a fraudulent scheme through the company she founded, Presidential Investments LLC. Between October 2018 and March 2022, she solicited $2 million from about 29 individuals or entities, supposedly for trading commodity futures contracts and options on commodity futures contracts on their behalf.
The Commission found that that with her actions, McDowell acted as a CTA but she was not registered as required by the Commodity Exchange Act (CEA).
Additionally, McDowell also made material misrepresentations about her services and omitted significant facts about her use of client funds and the profits purportedly earned by her clients. The regulator alleges that instead of using the solicited funds for trading options and futures contracts on the clients’ behalf, she actually did not conduct any trading but misappropriated client funds for her direct personal benefit.
The CFTC stated:
To conceal and perpetuate her fraudulent scheme, McDowell issued fabricated trade confirmations and updates to clients that falsely reflected profitable returns from her supposed trading activity.
McDowell pleaded guilty last November in a related criminal case the U.S. District Court for the Central District of California. She will be sentenced on 30 June.
