Feisal Sharif of Branford, Connecticut, is facing civil and criminal charges for allegedly operating a $5.4 million Ponzi scheme through his commodity pool, First Financial, LLC. The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action on November 26, 2012, in the U.S. District Court for the District of Connecticut.
Sharif is accused of misappropriating at least $900,000 of investor funds for personal expenses and gifts. The scheme reportedly solicited funds from at least 50 individuals, promising guaranteed monthly and yearly returns ranging from 1 to 15 percent. According to the CFTC complaint, between January 2007 and September 13, 2012, Sharif paid out approximately $3.17 million to earlier investors as fictitious profits, sustaining the Ponzi scheme.
The CFTC alleges that Sharif fabricated trading account statements to deceive participants into believing their funds were being actively and successfully traded. Of the $5.4 million collected, approximately $1.32 million was lost through actual futures trading, while the majority was either misappropriated or used to pay off previous investors. Sharif reportedly admitted to one participant that the operation was, in fact, a Ponzi scheme.
In addition to the CFTC’s civil action, the U.S. Attorney’s Office for the State of Connecticut filed criminal charges of wire fraud against Sharif on September 14, 2012. The CFTC is seeking civil monetary penalties, trading and registration bans, restitution, disgorgement of ill-gotten gains, and a permanent injunction against further violations of federal commodities laws. The case is being jointly investigated with the Securities and Business Investments Division of the State of Connecticut Department of Banking and the Federal Bureau of Investigation.
Source: CFTC.gov
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