MINNESOTA – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Richard “Rick” Miller and his company, Flip 2 Futures Trading Company LLC (F2F), alleging fraud, misappropriation, and unregistered activity. The case, filed in U.S. District Court for the District of Minnesota, centers around a commodity pool operated by Justin Dendinger and Punch Drunk Marketing LLC (PDM).
According to the CFTC complaint, from approximately July 2019 through November 2020, F2F acted as an unregistered commodity trading advisor (CTA), soliciting funds from PDM and engaging in discretionary trading on their behalf. Miller, acting as an unregistered associated person (AP) of F2F, allegedly failed to provide required disclosures and maintain proper records.
The CFTC alleges Miller misrepresented his futures trading performance and claimed to manage substantial assets to persuade PDM and Dendinger to transfer funds for trading futures contracts. Investigators claim Miller’s actual performance and assets under management were significantly less than represented. Furthermore, the complaint details the misappropriation of funds, alleging F2F and Miller failed to transfer all of PDM’s funds to their trading account and did not return withdrawn funds to PDM.
PDM and Dendinger are accused of operating as unregistered commodity pool operators (CPO) and associated persons, respectively. They allegedly commingled pool participant funds with their own and failed to provide required disclosures to investors. The CFTC reports PDM and Dendinger solicited $400,000 from nine pool participants in Minnesota and Wisconsin, subsequently misappropriating those funds by failing to fully transfer investments to F2F and Miller, and failing to return repaid funds to participants.
Adding to the charges, Dendinger is accused of making false statements to the CFTC, falsely claiming he had no trading accounts with registered futures commission merchants. The CFTC is seeking full restitution, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws.
The case is being pursued by Dmitriy Vilenskiy, Julia Colarusso, Christine Ryall, and Paul Haye of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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