Michael J. Leighton of Torrance, California, was ordered to pay $1,650,230 in restitution and a $700,000 civil penalty following a default judgment entered by Judge Philip S. Gutierrez of the U.S. District Court for the Central District of California on July 8, 2013. The judgment stems from a CFTC enforcement action filed on May 8, 2012, alleging Leighton engaged in solicitation fraud and issued false statements related to a commodity trading pool.
The CFTC found that Leighton defrauded at least 48 investors, securing over $1.65 million for his commodity pool between July 2008 and March 2012. He allegedly misrepresented his trading success and the pool’s profitability to current and potential investors.
According to the order, Leighton lost over $1.3 million of investor funds through trading but failed to disclose these losses. Instead, he distributed false written statements inflating the pool’s profitability and the value of investor shares. He also falsely claimed that the National Futures Association (NFA) and CME Group were conducting an audit that prevented distributions to investors, a claim the CFTC found to be untrue. Leighton further fabricated an audit report purportedly issued by the NFA.
In a related criminal case, the U.S. Attorney’s Office for the Central District of California charged Leighton with one count of commodities fraud on May 9, 2012. He pleaded guilty on July 11, 2012, and was sentenced to 60 months in prison on March 4, 2013. The current order permanently bans Leighton from trading commodities and registering with the CFTC.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office, the FBI’s Los Angeles Office, and the NFA in the investigation. The case was led by CFTC staff members Elizabeth N. Pendleton, Melissa Glasbrenner, William P. Janulis, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Source: CFTC.gov
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