Chicago, IL – Alvin Guy Wilkinson, of San Juan, Puerto Rico, has been slapped with a default judgment and permanent injunction following a Commodity Futures Trading Commission (CFTC) investigation into a multi-million dollar fraud. The U.S. District Court for the Northern District of Illinois found Wilkinson and his entities, Chicago Index Partners, L.P. (CIP) and Wilkinson Financial Opportunity Fund, L.P. (WFOF), guilty of defrauding 30 investors.
Wilkinson, a former member and leader within the Chicago Board Options Exchange (CBOE), allegedly misappropriated funds, fraudulently solicited investors, and provided false financial information to both customers and the National Futures Association (NFA). The CFTC complaint, initially filed in June 2016, charged Wilkinson and his entities with fraud, misappropriation, failure to register with the CFTC, and making false statements.
The court order, entered November 22, 2016, demands a total payment of $12,382,207.20 in civil penalties. Wilkinson is also ordered to disgorge $4,127,402.40 in ill-gotten gains and pay $5,389,381 in restitution to the defrauded investors. Additionally, the order imposes permanent bans on trading and registration, preventing future violations of the Commodity Exchange Act and CFTC Regulations.
From July 1999 until the complaint was filed, Wilkinson is accused of collecting $11,017,774 from investors, promising to trade a portfolio of financial instruments – including futures contracts – using a volatility strategy. However, the court found that Wilkinson instead misappropriated the funds, using some to pay earlier investors in a Ponzi-like scheme. He also allegedly falsified Schedule K-1 Forms to mislead investors about the profitability of their investments.
Investigators discovered that Wilkinson claimed investor funds were tied to a promissory note with an Australian financial firm, a claim that proved to be false. WFOF and CIP, the court found, held virtually no assets. Wilkinson allegedly fabricated reasons for delaying withdrawals when investors requested their money back, concealing the fact that the funds had been misappropriated and the investments were worthless.
Source: CFTC.gov
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