Northridge, California – The U.S. Commodity Futures Trading Commission (CFTC) announced charges of fraud and misappropriation of customer funds against Toby Wayne Denniston, II on January 16, 2007. The charges stem from Denniston’s activities as a former agent of Acceleration Capital, LLC, a registered commodity pool operator and commodity trading advisor.
The CFTC order found that between November 2004 and August 2005, Denniston misappropriated over $190,000 from the Acceleration Mercury Fund 4X LP, a commodity pool based in Northridge, California, for personal use. He allegedly carried out the scheme by forging signatures on at least 58 checks. To conceal his actions, Denniston falsified the pool’s bank and trading account statements, creating false reports sent to investors.
The CFTC holds Acceleration Capital liable for Denniston’s actions due to the company’s responsibility for the conduct of its agents. As a result, Acceleration Capital is ordered to pay approximately $218,000 in restitution, including pre-judgment interest. Additionally, the CFTC revoked Acceleration Capital’s registrations, prohibiting the company from future involvement in the commodity trading industry.
Yuri Plyam, a principal at Acceleration Capital, is prohibited from acting as a commodity pool operator or associated person for three years. Similar restrictions were placed on Plyam and related entities through a parallel settlement with the National Futures Association (NFA).
The NFA also levied penalties against CHP Asset Management LLC and Castle Trading, Inc., both affiliated with Plyam. CHP was fined $30,000, and both CHP and Acceleration Capital had their NFA memberships terminated. Castle Trading agreed to submit promotional materials for NFA approval and maintain a minimum net capital of $100,000 for 18 months.
The CFTC’s Division of Enforcement collaborated with the National Futures Association in this matter.
Source: CFTC.gov
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