New York, NY – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Kevin P. Whylie of Mamaroneck, New York, Matthew James Zecchini of East Islip, New York, and their company, Algointeractive Inc., alleging a fraudulent scheme that bilked investors out of at least $300,000. The complaint, filed in the U.S. District Court for the Southern District of New York, details a scheme operating from approximately April 2016 through the present.
According to the CFTC, Whylie and Zecchini solicited funds from the public to invest in a pooled investment vehicle for futures trading. However, the agency alleges that the defendants misappropriated the funds, commingled them with personal expenses, and issued false account statements to conceal losses and the misappropriation. They are also accused of false advertising and failing to register with the CFTC as required.
The complaint states that the defendants misrepresented their experience, track record, and assets under management to potential investors. They allegedly claimed that participant funds would be pooled and invested in futures contracts, but only a fraction of the solicited funds ever made it into a trading account. Approximately $60,000 has been returned to investors, some through what the CFTC describes as “Ponzi-style payments” using funds from other investors.
The CFTC alleges that Whylie and Zecchini used the misappropriated funds for personal and business expenses, including food, transportation, and entertainment. To further conceal the fraud, they allegedly created and distributed false account statements and expense charts that inflated the company’s assets and trading returns. Algointeractive was not operated as a separate legal entity, and participant funds were commingled with non-pool property.
The CFTC is seeking restitution for defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC Regulations. The agency acknowledged the cooperation of the National Futures Association (NFA) in the investigation.
The case is being handled by Trevor Kokal, David C. Newman, R. Stephen Painter Jr., Lenel Hickson Jr., and Manal M. Sultan of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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