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CNBC – The Commodities Futures Trading Commission will seriously consider imposing strict position limits on traders placing bets on energy contracts, and that’s just fine with hedge fund manager Mike Masters.
The head of Masters Capital Management blew the whistle on oil speculators last year when he testified before Congress regarding the rapid run-up in oil prices as it reached its record high of $145 a barrel. He is scheduled to testify at the CFTC hearings Aug. 5.
Masters, whose long/short equity fund manages approximately $1.06 billion according to data provider IPREO, believes stringent limits on commodities trading would work.
New York (HedgeCo.Net) – Texas Resident George D. Hudgins must pay $71 million following a federal court order obtained by the CFTC, to pay back victims of his Ponzi scheme and to settle a $15 million penalty.
According to the original complaint, Hudgins swindled about $88 million from June 2001 to May 2008, in a commodity pool operation that was supposed to trade futures and options. Hudgins told investors that his fund was reaping returns of up to 99 percent annually, when in reality, the pool had experienced a net loss since its inception in December 2003, and had lost a total of about $28 million.
In typical Ponzi scheme fashion, Hudgins used about $17 million from the pool to pay “returns” to existing investors and keep up the façade. In addition, he doctored the account statements to reflect a stellar performance. Other funds from the pool were withdrawn by Hudgins to pay for his extravagant lifestyle, which included Tiffany jewelry, antique sports cars, real estate and a plane.
When a judge froze the assets of Hudgins and appointed a receiver to distribute the funds, only $24 million was collected.
Last September, Hudgins pleaded guilty to wire fraud, money laundering and embezzlement. He was sentenced last month to serve 121 months in a federal prison.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) – Hedge fund manager Ray M. White and his company, CRW Management, LP, have been charged today by the Commodity Futures Trading Commission of swindling at least $10.9 million from over 250 investors through an alleged Ponzi scheme.
The complaint alleges that the Mansfield, Texas-based White, told investors their funds would be traded in the forex market and the strategy would reap returns of up to 416 percent annually.
Instead, White and CRW pocketed millions of dollars to fund a rampant spending spree which included homes, cars, Dallas Stars season tickets and the sponsorship of a drag racing team.
Out of the $10.9 million in initial capital they received, White and CRW used only $94,000 for forex trades. Ponzi schemes cease to work when new money coming in dries up; preventing the manager from paying back "returns" to anymore existing investors.
Christopher White and Hurricane Motorsports, LLC are also named by the CFTC as recipients of a portion of these funds in which they are not entitled to.
In the U.S. District Court for the Northern District of Texas, Judge Ed Kinkeade set the next hearing for March 11, while freezing assets and permitting the CFTC to seize records.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
New York (HedgeCo.Net) – Idaho Falls resident Daren L. Palmer has been charged with operating a $40 million Ponzi scheme through his unregistered company, Trigon Group, according to the Commodity Futures Trading Commission.
Palmer is being charged with solicitation fraud and misappropriation of pool funds after it was discovered he used client funds for personal expenses and failed to register with the CFTC as a commodity pool operator.
According to the complaint, Palmer allegedly bilked $40 million from investors since at least September 2000, by promising returns of 7 percent monthly and 20 percent annually. From that $40 million, he only placed $4.5 million in his trading accounts.
“This is another unfortunate example of the maxim, ‘If it appears too good to be true, it probably is,’ said Stephen J. Obie, Acting Director of the CFTC.
Palmer fraudulently claimed he was a successful futures trader and that his pool had a successful track record. Palmer doctored false account statements as a means to keep up the appearance. He later admitted to using new capital coming in to pay off older investors, in a typical Ponzi scheme fashion.
Palmer withdrew about $25,000 to $35,000 per month and used the money to pay off credit card debt, build a new home, and purchase snowmobiles. Palmer’s next hearing is scheduled for April 23rd.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
New York (HedgeCo.Net) – Two New York residents were charged yesterday by the Commodity Futures Trading Commission after allegedly misappropriating at least $553 million of client’s funds.
Stephen Walsh of Sands Point, NY and Paul Greenwood of North Salem, NY are being hit with futures fraud in connection with their companies, which include Westridge Capital Management Inc., WG Trading Investors, LP, and WGIA, LLC.
“Defendants treated investor money– some of which came from a public pension fund– as their own piggy bank to lavish themselves with expensive gifts,” said Stephen J. Obie, Acting Director of Enforcement for the CFTC.
According to the complaint, Walsh and Greenwood took approximately $1.3 billion from investors in their entities since 1996. The men allegedly told their clients that all of the funds would be employed in a single investment strategy of index arbitrage.
They then doctored false promissory notes to keep up the appearance to investors. In reality, the funds were transferred to another entity, where Walsh and Greenwood dipped into the cash for personal spending sprees which included horses, residences, and even an $80,000 teddy bear. It is estimated that they withdrew $160 million total for personal expenses.
The CFTC is seeking a statutory restraining order that will freeze their assets while preserving records.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
