Santa Fe, NM – April 8, 2021 – Douglas Lien of Santa Fe, New Mexico, has been slapped with over $10.3 million in sanctions and a permanent trading ban after admitting to running a two-decade-long Ponzi scheme, the Commodity Futures Trading Commission (CFTC) announced today.
The U.S. District Court for the District of New Mexico entered a consent order against Lien on Thursday, resolving a case initially filed on December 9, 2019. The order mandates Lien pay $5,195,679 in restitution to his victims and a civil penalty of the same amount. He is also permanently prohibited from trading commodity futures and registering as a futures commission merchant.
According to court documents, Lien solicited over $14.2 million from 45 individuals between August 2000 and December 2019, promising to manage their investments in U.S. Treasury Bond futures. Instead of investing the funds, however, Lien operated a classic Ponzi scheme, using money from new investors to pay existing clients. He pocketed over $3.5 million in fraudulent “management fees” based on fabricated trading profits.
Lien further concealed his scheme by issuing false account statements and inaccurate IRS Form 1099s, reporting millions in fictitious profits to clients. He also failed to register as a futures commission merchant, illegally soliciting funds for commodity futures trades.
The CFTC warns that victims may not fully recover their losses, as Lien may lack sufficient assets to cover the restitution. The agency pledged to continue pursuing accountability for financial crimes and protecting commodity futures customers. The New Mexico Securities Division provided crucial assistance in the investigation.
Source: CFTC.gov
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