Jimmy Gale Watson, of Dallas, Texas, has been permanently banned from commodity trading after being found liable for a manipulative “pump-and-dump” scheme involving digital assets, the Commodity Futures Trading Commission (CFTC) announced July 18, 2022.
The U.S. District Court for the Southern District of New York entered a consent order on July 14, 2022, requiring Watson to disgorge $146,000 in ill-gotten gains and pay an equal amount as a civil monetary penalty, totaling $292,000. The order also permanently prohibits Watson from violating the Commodity Exchange Act (CEA) and CFTC regulations.
The CFTC initially filed charges against Watson and John David McAfee on March 5, 2021, alleging they conspired to artificially inflate the price of certain digital assets through misleading social media endorsements. Watson’s role in the scheme involved selecting the digital assets targeted for manipulation and secretly accumulating positions in them before the endorsements were made public.
According to the CFTC, Watson and McAfee “pumped” the assets by promoting them on social media, creating artificial demand. They then “dumped” the assets by selling their holdings at inflated prices, profiting from the scheme while deceiving investors. The court found that Watson concealed his pre-existing positions and intent to sell, a key element of the manipulative practice.
“The CFTC will continue actively to use its enforcement authority in the digital asset space to combat fraud and manipulation,” stated Gretchen Lowe, Acting Director of Enforcement for the CFTC.
The CFTC collaborated with the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Securities and Exchange Commission during the investigation. David M. Oakland, Christopher Giglio, Alejandra de Urioste, K. Brent Tomer, Lenel Hickson, Jr., Manal M. Sultan, and former Enforcement staff member Gates Hurand led the case for the CFTC’s Division of Enforcement, with assistance from the Digital Assets Task Force.
Source: CFTC.gov
Related Federal Cases
- Tren de Aragua Leaders Unsealed, Terror Cartel Crimes, Texas, 2023 · Nebraska
- Ken Paxton Issued Notice for Election Code Violations, Texas, 2025 · Texas
- Jim C Hodge, FHA Insurance Program Fraud, Texas 2019 · New York
- Jim C. Hodge, $92M FHA Mortgage Fraud, Texas 2000s · New York
- Hugh Lappe Scott Jr, Health Care Fraud, Texas · Texas
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News