Brett G. Hartshorn of Sarasota, Florida, is facing civil charges from the U.S. Commodity Futures Trading Commission (CFTC) alleging a multi-year forex fraud scheme. The CFTC filed the action in the U.S. District Court for the Southern District of New York on December 28, 2016.
Hartshorn is accused of fraudulently soliciting and managing at least $906,000 from at least 13 retail clients for off-exchange foreign currency trading between June 2008 and 2014. The CFTC alleges that Hartshorn misappropriated at least $57,414 of client funds for personal use.
According to the complaint, Hartshorn met many of his victims through his local church or social circles. He allegedly told clients he was a profitable forex trader and could deliver substantial returns with limited risk. However, the CFTC asserts these statements were false, as Hartshorn employed risky strategies and concealed significant trading losses.
The agency further alleges Hartshorn failed to disclose a “profit” sharing arrangement that allowed him to be compensated even as clients incurred losses. He also allegedly failed to register with the CFTC as a Commodity Trading Advisor (CTA) and did not produce required books and records when subpoenaed.
The CFTC is seeking restitution for defrauded customers, disgorgement of ill-gotten gains, a civil monetary penalty, permanent trading and registration bans, and a permanent injunction against further violations of federal commodities laws. The investigation received assistance from the Federal Bureau of Investigation (Sarasota, Florida) and the U.K. Financial Conduct Authority.
The CFTC encourages anyone with information about potential commodity trading violations to contact them via toll-free hotline at 866-FON-CFTC or submit a tip online.
Source: CFTC.gov
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