A New York man and his firm are facing both civil and criminal charges for allegedly defrauding investors out of at least $345,000, the Commodity Futures Trading Commission (CFTC) announced Thursday. Craig L. Clavin and his company, Lighthouse Futures, Ltd., are accused of running a multi-year scheme involving the fraudulent solicitation of funds for commodity futures investments.
The CFTC filed a civil enforcement action in the U.S. District Court for the Eastern District of New York, alleging that Clavin and Lighthouse Futures engaged in fraudulent solicitation, misappropriation of funds, commingling of funds, and failure to register with the CFTC as a commodity pool operator. The alleged fraud occurred from at least 2015 through 2019.
According to the complaint, Clavin and Lighthouse Futures promised investors participation in the commodities markets and the ability to withdraw funds annually. However, the vast majority of the invested funds were not actually used for trading. Instead, the CFTC alleges that Clavin misappropriated the money for personal expenses, including travel, meals, and purchases like patio furniture. Remaining funds were reportedly used to pay earlier investors in a Ponzi-like scheme.
The defendants are also accused of falsely representing the success of the commodity pool and claiming an exemption from CFTC registration. Lighthouse Futures operated as an unregistered commodity pool operator, and Clavin acted as an unregistered associated person, the complaint states.
The CFTC is seeking disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations. Simultaneously, the Suffolk County District Attorney’s Office announced a criminal indictment against Clavin and Lighthouse Futures in Suffolk County Supreme Court.
The CFTC advises the public to verify a company’s registration status before investing and warns of the dangers of unregistered commodity pool operators. Information about registration can be found using NFA BASIC. Individuals can report suspicious activity to the CFTC’s Division of Enforcement.
Source: CFTC.gov
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