Washington, D.C. – A federal court has permanently barred Hendrik A. Van Beuningen and his company, DeBrink Trading Fund I, LLC, from engaging in commodity trading and registration activities following a fraud investigation by the U.S. Commodity Futures Trading Commission (CFTC). The court order, entered August 1, 2016, also requires Van Beuningen and DeBrink to pay a combined $910,000 in penalties and restitution.
The CFTC filed its complaint under seal on March 28, 2016, alleging violations of the Commodity Exchange Act (CEA) related to anti-fraud provisions, misappropriation of funds, and registration failures. Judge Timothy C. Batten, Sr. of the U.S. District Court for the Northern District of Georgia presided over the case.
Between February 2014 and January 2016, Van Beuningen and DeBrink allegedly solicited at least $505,000 from five investors, promising to trade foreign currency, bonds, oil, and gold futures contracts. However, the court found that the defendants failed to maintain the investor funds as a separate legal entity, instead depositing them into a DeBrink bank account and commingling them with company funds.
Investigators determined that approximately $365,000 received from investors between February 2014 and May 2015 was only partially transferred to a Futures Commission Merchant (FCM) account – totaling $228,405. By September 30, 2015, nearly all of those transferred funds were lost through unsuccessful trading, leaving only $7,632. An additional $140,000 received in November 2015 and January 2016 was allegedly misappropriated and never deposited into a trading account.
Despite significant trading losses, the defendants falsely reported positive returns to investors. In October 2015, their website claimed a 19.41% return for 2014 and a 31.77% cumulative return, while the fund had, in reality, experienced cumulative losses. As recently as March 2016, fabricated account statements were provided to investors, falsely indicating an average 37.47% return on their $505,000 investment.
The CFTC warns that restitution orders do not guarantee full recovery of lost funds, as defendants may lack sufficient assets. The agency stated it will continue to pursue legal action to protect commodity market participants.
Source: CFTC.gov
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