Daniel Adam Hewko and his father, Daniel Hewko, of California, were charged with fraud by the U.S. Commodity Futures Trading Commission (CFTC) on November 13, 2019, in a civil enforcement action filed in the U.S. District Court for the Central District of California. The complaint also names Main & Prospect Capital, LLC as a defendant.
The CFTC alleges that from at least August 2014, the defendants fraudulently solicited over $2.3 million from at least 19 investors for the Global Opportunity Fund, a pooled investment vehicle operated by Main & Prospect Capital. While marketing the fund as investing in stocks, commodities, and foreign currency, the defendants allegedly misappropriated over $1.1 million of investor funds for their personal benefit.
According to the complaint, Adam Hewko directed the creation of false account statements claiming the fund was profitable, which were then distributed to investors by Daniel Hewko. When investors sought to withdraw their funds, Daniel Hewko allegedly fabricated reasons for delaying withdrawals, including claims of ongoing “trades” and the CFTC investigation itself. He also continued to falsely represent that investments were profitable.
The CFTC further alleges that Main & Prospect Capital failed to operate as a separate legal entity and did not register with the CFTC as a commodity pool operator. Both Adam and Daniel Hewko are accused of failing to register with the CFTC as associated persons of the firm, violating Commission regulations.
The CFTC is seeking full restitution for defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act.
Individuals with information about potential commodity trading violations are encouraged to contact the CFTC Division of Enforcement via the toll-free hotline at 866-FON-CFTC (866-366-2382) or submit a tip or complaint online.
Source: CFTC.gov
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