Wayne P. Weddington III, of New York, New York, has been permanently banned from trading and registration in commodity markets after being found guilty of fraud, the U.S. Commodity Futures Trading Commission (CFTC) announced on August 5, 2015. The ruling, entered by Judge Colleen McMahon of the U.S. District Court for the Southern District of New York on August 4, 2015, follows a complaint filed by the CFTC in April 2014, and an amended complaint in December 2014.
Weddington, along with his companies Brunswick Capital LLC and Brunswick Capital Partners LP, was charged with solicitation fraud, misappropriating customer funds, making false statements, and operating unregistered commodity pools. The CFTC alleged that the defendants fraudulently obtained approximately $1.35 million from investors by filing a false exemption claim and fabricating trading results for a quantitative algorithm designed to trade E-mini S&P 500 futures contracts and other index futures.
According to the order, Weddington and his companies created false financial and trading records to falsely portray consistent monthly profits, when in reality, the algorithm consistently lost money. They then allegedly used these fabricated results to solicit further investment from hedge funds and institutional investors. The defendants are jointly required to pay a $650,000 civil monetary penalty and $375,039 in restitution to defrauded customers.
The CFTC cautions that restitution orders do not guarantee full recovery of lost funds, as defendants may lack sufficient assets. The agency encourages anyone with information about commodity trading violations to contact the CFTC via its toll-free hotline at 866-FON-CFTC or submit a tip online.
The case was led by CFTC Division of Enforcement staff members Camille M. Arnold, Allison Passman, Judith McCorkle, Melissa Glasbrenner, Joseph Konizeski, Scott Williamson, and Rosemary Hollinger.
Source: CFTC.gov
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