The U.S. Commodity Futures Trading Commission (CFTC) filed an enforcement action in the U.S. District Court, Northern District of Illinois, charging Defendant, William H. Powderly IV (Powderly) of New Hope, Pennsylvania, with fraudulently soliciting at least $825,000 from at least four customers for purposes of trading commodity futures on their behalf in an account in Powderly’s name.
The Complaint also charges Powderly with making and providing false and misleading account statements to his customers.
In particular, the Complaint alleges that from at least January 2016 through October 2016, Powderly solicited customers and prospective customers by claiming that he and a university professor had developed a commodity futures trading program that generated exceptional hypothetical trading results and that “beta” testing of this system generated consistent gains without a single day of loss. The Complaint further alleges that when soliciting customers and prospective customers, Powderly failed to tell them that the actual commodity trading he conducted for his commodity account during that 10-month period was consistently unprofitable, sustaining losses every month during that time. Additionally, the Complaint alleges that Powderly created false account statements for his trading account and sent them to his customers in order to conceal his trading losses.
In its continuing litigation against the Defendant, the CFTC seeks full restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against violations of the federal commodities laws, as charged.