Lon Friedrichsen of Alton, Iowa, has been permanently banned from trading commodities after a federal court found him liable for a fraudulent scheme involving oil futures contracts. The Commodity Futures Trading Commission (CFTC) secured a default order against Friedrichsen on November 26, 2018, following a complaint filed in March of the same year.
Judge Gregory H. Woods of the U.S. District Court for the Southern District of New York ruled that Friedrichsen illegally traded NYMEX West Texas Intermediate Light Sweet Crude Oil futures contracts on behalf of at least 41 customers between June 25, 2014, and June 30, 2018, without being properly registered with the CFTC. Friedrichsen solicited customers through platforms like Craigslist, falsely claiming to be a registered trader capable of generating 10 percent daily profits.
The CFTC alleges Friedrichsen misrepresented his trading experience and fabricated account statements to attract investors. These reports falsely indicated substantial profits and millions of dollars under his management. However, the court found that Friedrichsen’s actual trading resulted in losses of at least $591,570 for his customers.
Under the terms of the order, Friedrichsen is required to pay $591,570 in restitution to his victims and a civil penalty of $1,500,000. He is also permanently prohibited from engaging in any future violations of the Commodity Exchange Act and CFTC Regulations, effectively barring him from the regulated commodities markets.
The case was led by CFTC Division of Enforcement staff members Daniel J. Grimm, Dmitriy Vilenskiy, George Malas, A. Daniel Ullman II, Michael R. Berlowitz, Paul G. Hayeck, and former staff members Lucy Hynes and Jason Mahoney.
Source: CFTC.gov
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