Alta Loma, CA – August 8, 2006 – Toby Wayne Denniston, II, a former employee of Castle Trading Inc., is facing penalties and restitution orders following a CFTC investigation into misappropriated funds. The U.S. Commodity Futures Trading Commission announced an order filed and settled on August 7, 2006, detailing charges of fraud and misappropriation against Denniston, a resident of Alta Loma, California.
The CFTC found that between November 2004 and August 2005, Denniston misappropriated over $190,000 from Acceleration Mercury Fund 4X LP, a commodity pool based in Northridge, California. Denniston, who was never registered with the Commission, allegedly used the funds for personal expenses, including a BMW automobile, vacations, and electronic equipment. The misappropriation was carried out through the forgery of signatures on at least 58 checks.
To cover his tracks, Denniston reportedly altered bank and trading account statements for the commodity pool and fabricated false statements for distribution to pool participants. These actions constitute violations of the Commodity Exchange Act, according to the CFTC order.
As a result of the settlement, Denniston is ordered to pay a $250,000 civil penalty and approximately $209,000 in restitution, including pre-judgment interest. He is also permanently prohibited from trading on or with any registered entity and is barred from seeking registration with the CFTC or acting in a registered capacity within the commodities market.
The CFTC noted the assistance of the National Futures Association in pursuing this case. The Division of Enforcement staff involved included Lacey Dingman, Theodore Joseph Dowd, II, Joseph Vargyas, Michael Solinsky, Gretchen L. Lowe, and Richard Wagner.
Source: CFTC.gov
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