KANAB, UTAH – November 29, 2021 – Travis Capson, of Kanab, Utah, and Arnab Sarkar, of El Cerrito, California, have been ordered to pay over $3.8 million in restitution and penalties for operating a fraudulent foreign exchange (forex) pool, the Commodity Futures Trading Commission (CFTC) announced today.
The U.S. District Court for the Northern District of California entered a consent order on November 29, 2021, against Capson, Sarkar, and their company, Denari Capital, LLC, resolving a CFTC action initially filed on November 5, 2019. The order finds all three defendants liable for forex pool fraud and failing to register with the CFTC as required.
Capson and Sarkar were each assessed civil monetary penalties of $250,000 and $166,000, respectively. Combined with their company, Denari, they are collectively responsible for $3,663,282 in restitution to victims of the scheme. The court also imposed a permanent injunction prohibiting further violations of the Commodity Exchange Act and CFTC regulations, permanent registration bans, and five-year trading bans for Capson and Sarkar.
According to the court findings, from at least August 2012 to December 2019, the defendants fraudulently solicited investments for Denari, falsely representing the past profitability of their forex trading. They allegedly issued fabricated account statements to investors, misrepresented pool fund management, commingled funds improperly, and failed to provide necessary disclosures. The CFTC also found that Capson made false statements to the National Futures Association (NFA) during an examination, claiming Denari had only traded forex with proprietary funds until 2019.
Kathy Bazoian Phelps has been appointed as the Permanent Receiver for Denari and has already recovered and distributed over $700,000 in funds and $2.5 million in securities to satisfy claims. However, the CFTC cautions victims that full restitution may not be possible due to potential limitations in the defendants’ assets.
The CFTC expressed gratitude for the assistance provided by the NFA in this case. The Division of Enforcement staff members involved in the action included Carlin Metzger, Joy McCormack, Matthew Edelstein, Joseph Konizeski, Scott Williamson, and Robert Howell.
The CFTC encourages anyone suspecting commodity trading fraud to contact them via their toll-free hotline at 866-FON-CFTC (866-366-2382) or to file a tip or complaint online.
Source: CFTC.gov
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