Washington, D.C. – Alexander Glytenko, of Carlsbad, California, is facing charges of fraud following a civil enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) on December 12, 2013. Glytenko, the principal of Direct Investment Products, Inc. (DIP), allegedly defrauded approximately 761 individuals in Russia and former Soviet republics out of $3.9 million through a commodity pool named DIP Capital Partners.
The CFTC complaint details how Glytenko and DIP knowingly misrepresented the Pool’s performance history from approximately 2005 to 2010. The defendants allegedly presented fabricated profit figures for years the Pool didn’t even exist, offered hypothetical trading performance as real results, and falsely claimed profitability for funds that actually experienced losses.
Specifically, Glytenko and DIP allegedly claimed the Pool generated annual profits ranging from 12.60% to 47.20% between 2003 and 2008. They also allegedly falsely stated that two of the Pool’s funds yielded annual profits from 12.01% to 49.79% between 2004 and 2008. These claims were made to both prospective and current investors, with some materials extending the false profit history back to 2002.
According to the CFTC, DIP Capital Partners wasn’t established until 2005. The reported profit figures were not based on actual trading but on the hypothetical performance of Glytenko’s trading strategy. Certified financial statements revealed actual losses in 2007 and 2008 for one of the Pool’s funds.
The complaint further alleges that in 2009, after freezing participant withdrawals due to substantial losses, Glytenko misappropriated $464,000 in participant funds by loaning the money from DIP to himself. This loan remains unpaid.
DIP is registered with the CFTC as a Commodity Trading Advisor (CTA) and Commodity Pool Operator (CPO) since April 2007. Glytenko has been registered as an Associated Person (AP) of DIP since the same date. The CFTC is seeking civil monetary penalties, restitution, disgorgement of ill-gotten gains, trading and registration bans, and a permanent injunction against further violations of federal commodities laws.
Source: CFTC.gov
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