McHenry, IL – July 26, 2010 – Joseph A. Dawson, 41, of Fox Lake, Illinois, has been charged with commodity fraud by the U.S. Commodity Futures Trading Commission (CFTC). The charges stem from the misappropriation of over $2 million from investors in a commodity pool managed by Dawson and his company, Dawson Trading LLC, based in McHenry, Illinois.
According to a complaint filed with the U.S. District Court for the Northern District of Illinois on July 20, 2010, Dawson and his company allegedly misused pool participant funds for personal expenses between February 2005 and December 2009. These expenses included a down payment and mortgage payments on a personal residence, as well as the installation of an in-ground swimming pool, landscaping, furniture, car payments, restaurant bills, and entertainment.
The CFTC alleges that Dawson fraudulently solicited investors by falsely claiming successful trading experience, while in reality, he lost nearly $1 million trading commodity futures and securities between July 2005 and December 2009. Furthermore, the complaint details instances where Dawson sent investors falsified account statements, misrepresenting the profitability of their investments. For example, in the second quarter of 2007, Dawson reported a nearly $100,000 gain for a participant, despite actually losing approximately $453,808 during that period.
Dawson Trading is also charged with failing to register as a commodity pool operator, and Dawson himself is accused of failing to register as an associated person of a commodity pool operator, both violations of CFTC regulations.
The CFTC is seeking disgorgement of ill-gotten gains, civil monetary penalties, and injunctions against further violations of the Commodity Exchange Act and related regulations. A criminal complaint was also filed against Dawson in the U.S. District Court for the Northern District of Illinois on December 17, 2009, related to this scheme. The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Northern District of Illinois, the Federal Bureau of Investigation, and the Securities and Exchange Commission in this matter.
Source: CFTC.gov
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