James A. Donelson of Aurora, Illinois, along with three other individuals and a trading firm, are facing charges of defrauding customers through a misleading options trading program, the Commodity Futures Trading Commission (CFTC) announced on June 29, 2020. Donelson, the principal of Long Leaf Trading Group, Inc., is accused of orchestrating a scheme that resulted in over 400 customers losing approximately $6.1 million between June 2015 and December 2019.
Also charged are Timothy M. Evans of Tulum, Mexico, Jeremey S. Ruth of Austin, Texas, and Andrew D. Nelson of Elmhurst, Illinois. The CFTC alleges that Long Leaf, under the direction of Donelson and Evans, knowingly made false and misleading statements about the success of their “Time Means Money” options trading program. Despite all customers losing money through the program, the defendants allegedly failed to disclose these losses, continuing to solicit investments and generating over $4.4 million in commissions.
The CFTC’s complaint details a systematic effort to mislead customers, leveraging the firm’s registration status to gain trust while knowingly recommending a failing trading strategy. In addition to Donelson, Evans, Ruth, and Nelson, the CFTC also settled charges against Scott J. Gecas of Tinley Park, Illinois, and James E. Leeney of Chicago, Illinois, for their involvement in the scheme. Gecas was ordered to pay a $150,000 civil penalty and is barred from trading and registration for four years. Leeney faces a $350,000 penalty and a five-year ban from trading and registration.
The CFTC is seeking restitution for the defrauded customers, disgorgement of Long Leaf’s ill-gotten gains, civil monetary penalties, and permanent injunctions against further violations of the Commodity Exchange Act (CEA) and CFTC regulations. The agency also seeks permanent trading and registration bans for Donelson, Evans, Ruth, and Nelson. The National Futures Association assisted the CFTC in this investigation.
“The CFTC is committed to stamping out fraud in its markets,” stated CFTC Director of Enforcement James McDonald. “The CFTC urges customers to exercise caution when investing in so-called ‘trading programs’ offered by brokers or advisors.”
Source: CFTC.gov
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