Branford, CT – Feisal Sharif, 43, was ordered to pay $3,130,000 in restitution and penalties for defrauding commodity pool investors, the U.S. Commodity Futures Trading Commission (CFTC) announced today. The federal court order, issued November 21, 2013, by Judge Stefan R. Underhill of the U.S. District Court for the District of Connecticut, also permanently bans Sharif from trading commodities and registering with the CFTC.
The CFTC initially filed a complaint against Sharif on November 26, 2012, alleging fraudulent solicitation, misappropriation of funds, and failure to register as a Commodity Pool Operator. The investigation revealed that between January 2007 and September 2012, Sharif, operating through First Financial LLC, collected over $5.4 million from at least 50 investors to trade commodity futures contracts.
However, rather than legitimately investing the funds, Sharif only traded a portion of the money, incurring significant losses. He then allegedly misappropriated the majority of investor funds, using them to falsely inflate account statements and pay “returns” to participants, creating a Ponzi-like scheme. Sharif also diverted funds for personal use, according to the court order.
Sharif concealed the losses and fraudulent activity from investors by issuing fabricated account statements showing profits and offering misleading explanations about the safety of their investments. He failed to register with the CFTC as required by the Commodity Exchange Act.
In addition to the CFTC’s civil enforcement action, Sharif previously pled guilty to criminal violations of the CEA and is scheduled to be sentenced in January 2014. The CFTC acknowledged the assistance of the State of Connecticut Department of Banking, the Federal Bureau of Investigation, and the U.S. Attorney’s Office for the District of Connecticut in the investigation.
The case was led by CFTC staff members Amanda Harding, James Deacon, Jessica Harris, Kenneth McCracken, Rick Glaser, and Richard Wagner.
Source: CFTC.gov
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