Libertyville, Illinois resident Mark R. Slobodnik has been ordered to pay approximately $370,000 in penalties for his role in a $1.76 million commodity pool fraud scheme, the Commodity Futures Trading Commission (CFTC) announced today.
U.S. District Judge Manish Shah of the Northern District of Illinois issued a Consent Order for Permanent Injunction on November 9, 2018, requiring Slobodnik to pay $280,000 in restitution to defrauded investors. He must also disgorge $45,342.44 in ill-gotten gains and pay a $45,342.44 civil monetary penalty. Additionally, the order imposes a five-year ban on Slobodnik’s ability to trade commodities or register with the CFTC.
The charges stem from a CFTC complaint filed in January 2018, alleging Slobodnik, along with co-defendants Richard D. Carter and the entity Blue Guru, LLC, engaged in fraud, misappropriation of funds, and failure to register with the agency. The investigation revealed that from April 2014 through the filing of the complaint, Slobodnik knowingly misled investors about the profitability of the Blue Guru commodity pool.
Specifically, Slobodnik falsely claimed that Blue Guru was actively trading futures contracts, including Dow Jones E-mini and S&P 500 E-mini contracts on the Chicago Mercantile Exchange (CME). However, the defendants only utilized less than two-thirds of the $1.76 million raised for actual trading. Slobodnik promised investors an 8 percent annual return on their investment, plus 50 percent of any gross trading profits, while simultaneously being aware of communications falsely indicating consistent profits.
The Order found Slobodnik personally responsible for approximately $249,000 of the $501,000 in trading losses incurred by Blue Guru. He also misappropriated $45,342.44 of participant funds and ignored or actively misled investors attempting to withdraw their money.
In a related action, Judge Shah previously entered a default order against Blue Guru, LLC in May 2018, ordering the company to pay $1,400,076.78 in restitution, $1,400,076.78 in disgorgement, and a $4,200,230.34 civil penalty. The case against Richard D. Carter remains ongoing.
The CFTC advises that recovery of funds for victims is not guaranteed, as wrongdoers may lack sufficient assets. The agency stated it will continue to pursue accountability in the case.
Source: CFTC.gov
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