NEW YORK, NY – Michael Ackerman of Alliance, Ohio, has been permanently banned from trading in CFTC-regulated markets after a federal court found him liable for a multi-million dollar digital asset fraud. Judge Naomi Reice Buchwald of the U.S. District Court for the Southern District of New York issued a default judgment on June 13th, imposing a hefty $27 million civil monetary penalty and requiring Ackerman to pay $27 million in restitution to victims.
The judgment resolves a case brought by the Commodity Futures Trading Commission (CFTC) stemming from a complaint filed in February 2020. The CFTC alleged that from August 2017 to December 2019, Ackerman orchestrated a scheme to defraud investors by soliciting funds for the purported trading of digital commodity assets. According to the complaint, Ackerman misappropriated the majority of the over $33 million deposited by more than 150 individuals and entities.
Investigators found that less than $10 million of the funds were actually used for trading. The remaining capital was allegedly diverted for Ackerman’s personal use or used to sustain the fraudulent operation. To attract investors, Ackerman falsely claimed to be a profitable trader consistently achieving monthly returns of around 15%. The CFTC contends these claims were entirely fabricated.
Ackerman allegedly concealed the truth by providing customers with falsified accounting statements, misleading newsletters touting fake trading returns, and doctored screenshots of account balances. This elaborate deception was designed to maintain the illusion of a successful investment opportunity.
This CFTC action runs parallel to a criminal case also heard in the Southern District of New York. In February 2022, Ackerman was sentenced to five years of probation, including one year of home confinement. He was previously ordered in August 2022 to pay $31 million in restitution as part of the criminal proceedings.
The CFTC warns that victims may not fully recover their losses, as the defendant may lack sufficient assets. The agency stated it will continue to pursue accountability for those who harm market participants. The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Securities and Exchange Commission in the investigation.
Source: CFTC.gov
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