CHICAGO, IL – On September 6, 2012, the U.S. Commodity Futures Trading Commission (CFTC) took emergency action against Nikolai S. Battoo and a network of affiliated entities collectively known as the BC Common Enterprise. The CFTC filed a complaint in the U.S. District Court for the Northern District of Illinois, seeking to freeze assets and appoint a receiver for the group.
The complaint alleges that Battoo and the BC Common Enterprise operated a series of commodity pools under the name “Private International Wealth Management” (PIWM), fraudulently soliciting over $140 million from U.S. residents. The CFTC accuses the defendants of making false statements and omitting critical information regarding substantial losses suffered by the PIWM pools.
Specifically, the CFTC alleges that in 2008, Battoo failed to disclose the PIWM pools’ significant exposure to the Bernard Madoff Ponzi scheme, as well as trading losses incurred by other hedge funds in which the pools had invested. In 2009, the defendants allegedly overstated the value of the PIWM pools’ investments in asset verification documents sent to pool participants. Further, in 2011, the CFTC claims the defendants misrepresented the impact of the MF Global, Inc. bankruptcy, using it as a pretext to avoid returning funds to investors.
The CFTC is seeking a permanent injunction against future violations of federal commodities laws, permanent registration and trading bans for Battoo and the entities, full restitution for defrauded investors, disgorgement of ill-gotten gains, and civil monetary penalties. The agency acknowledged assistance from the U.S. Securities and Exchange Commission (SEC) in the investigation.
The case is being pursued by the CFTC’s Division of Enforcement, led by Andrew Ridenour, Amanda Harding, David Slovick, and others. The investigation remains ongoing.
Source: CFTC.gov
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