Dallas, TX – Carl W. King, 62, was permanently barred from the commodities market and ordered to pay nearly $5 million in restitution and penalties after being found guilty of operating a Ponzi scheme, according to a judgment entered by U.S. District Court Judge Barbara M.G. Lynn of the Northern District of Texas on May 22, 2007.
The CFTC initially filed a complaint against King and his firm, Carl W. King Investments, LLP, on August 30, 2006, alleging a fraudulent scheme that spanned from at least 1995 through February 2003. The agency accused King of misappropriating over $4.5 million from investors.
Court documents revealed that King solicited approximately $9 million from customers, falsely claiming to be trading commodity futures on their behalf and promising annual returns of around 20%. However, the investments generated no profits. Instead, King used customer funds for personal expenses and to cover the operating costs of his firm. He further deceived investors by issuing fabricated account statements showing fictitious balances and earnings.
The judgment orders King and Carl W. King Investments to jointly and severally pay $4,499,146.51 in restitution, matching an award previously entered in a related criminal case. A civil monetary penalty of $449,914.65 was also imposed, to be paid after the restitution is fulfilled. Both King and his firm are permanently prohibited from any future involvement in commodity-related activities.
In a parallel criminal proceeding in the United States District Court for the Eastern District of Texas, King pleaded guilty to one count of mail fraud. He is currently serving an 87-month prison sentence for his crimes. The CFTC collaborated with the Securities and Exchange Commission, the Texas State Securities Board, and the United States Attorney’s Office for the Eastern District of Texas during the investigation.
Source: CFTC.gov
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