Charlotte, NC – Mark N. Pyatt, also known as Daniel Randolph, is facing both civil and criminal charges for allegedly defrauding investors out of approximately $200,000 through his firm, Winston Reed Investments LLC (WRI). The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Western District of North Carolina on February 20, 2020, alleging misappropriation of customer funds and fraudulent solicitation.
According to the complaint, from April 2017 through February 2019, WRI and Pyatt solicited funds from at least 19 investors for a commodity pool intended for trading commodity futures contracts and retail foreign exchange. However, the CFTC alleges that the majority of those funds were misused – diverted to cover business expenses, personal spending, and used to create a Ponzi-like scheme by paying earlier investors with money from new investors.
Despite reportedly incurring net trading losses, Pyatt and WRI allegedly sent false reports to investors, claiming monthly profits ranging from 19% to 86%. The CFTC seeks restitution for the defrauded pool participants, along with disgorgement of any ill-gotten gains, civil monetary penalties, and a permanent ban from trading and registering with any commodity exchange. They are also seeking a permanent injunction to prevent further violations of the Commodity Exchange Act.
Simultaneously, the U.S. Attorney’s Office for the Western District of North Carolina announced a separate criminal case against Pyatt, charging him with wire fraud, securities fraud, investment adviser fraud, and money laundering (United States v. Pyatt, Case No. 1:20-CR-16).
The CFTC acknowledged the assistance of the Securities and Exchange Commission’s Denver Regional Office and the U.S. Attorney’s Office for the Western District of North Carolina in this investigation. The case is being pursued by CFTC staff members James Garcia, Michael Loconte, and Rick Glaser.
Source: CFTC.gov
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