WASHINGTON, D.C. – Daniel J. Bealko, a former global commodity manager for General Motors, was penalized by the Commodity Futures Trading Commission (CFTC) following a scheme to defraud his employer. The charges stem from unauthorized trading activities conducted between June 2003 and December 7, 2003, while Bealko was responsible for GM’s aluminum hedging strategies.
According to the CFTC order filed on September 20, 2010, Bealko, formerly of Clarkston, Michigan, illicitly diverted GM-owned aluminum warrants to a brokerage account held under a third party’s name. He then secured power-of-attorney, granting him full control over the account. Using this access, Bealko sold New York Mercantile Exchange (NYMEX) aluminum futures and options, personally profiting approximately $6.5 million from GM’s surplus aluminum sales – all without the company’s knowledge or consent.
Bealko’s actions also led to criminal charges. He pled guilty on November 5, 2009, to one count of wire fraud and one count of income tax evasion. On March 17, 2010, he received a 70-month prison sentence and was ordered to pay full restitution to GM, totaling the $6.5 million in ill-gotten gains.
In addition to the criminal penalties, the CFTC order permanently bans Bealko from trading and registering with the CFTC, and requires him to cease and desist from violating the anti-fraud provisions of the Commodity Exchange Act. Bealko is currently in the custody of the Federal Bureau of Prisons. The CFTC acknowledged the assistance of the Federal Bureau of Investigation in the investigation.
Source: CFTC.gov
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