Orlando, Florida – Terrence R. Pipenhagen has been charged with commodity futures fraud by the U.S. Commodity Futures Trading Commission (CFTC), the agency announced August 30, 2010. Pipenhagen, along with his companies TRP Advisory Group, Inc. and Traders East, Inc., allegedly issued false statements to customers to cover up significant trading losses.
The CFTC’s order mandates that Pipenhagen, TRP, and TEI collectively pay a $150,000 civil penalty. Furthermore, they are permanently barred from trading on registered entities, either for themselves or on behalf of others, and are prohibited from ever seeking registration with the CFTC.
According to the order, between mid-2002 and August 2006, Pipenhagen operated a commodity futures pool and managed individual accounts. He is accused of defrauding customers by providing fabricated account statements designed to conceal losses and prevent withdrawals. Pipenhagen reportedly solicited at least $450,000 from nine individuals he knew from his previous work in insurance and securities sales.
Pipenhagen allegedly promised consistent gains and high returns to investors. However, the CFTC found that he consistently incurred trading losses, ultimately losing all of his customers’ funds. The order cites an instance where Pipenhagen sent a statement reporting over $10,000 in profits for an account that had been closed for months, having already sustained over $75,000 in losses.
Customers eventually discovered the deception when they attempted to access their investments. Pipenhagen and his companies also violated federal law by failing to register with the CFTC as a Commodity Pool Operator and Associated Person, and by failing to comply with relevant regulatory requirements.
The case was led by CFTC Division of Enforcement staff members Timothy M. Kirby, Kevin K. Batteh, Gretchen L. Lowe and Phyllis J. Cela.
Source: CFTC.gov
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