Wayne Pennoyer Weddington III, of New York, New York, faces charges of solicitation fraud, making false statements, and registration violations stemming from a commodity pool he established known as Pennoyer International Funds Global Opportunity LLC, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on April 18, 2014.
The CFTC alleges that Weddington created the Pennoyer Fund in 2007 to trade E-mini S&P 500 futures contracts and other index futures. Brunswick Capital LLC (BCLLC) and Brunswick Capital Partners LP (BCLP) were designated as the Fund’s operator and trading advisor, respectively. While CFTC regulations require registration for such entities, exemptions exist for those registered with other regulators where commodity futures trading is considered incidental.
The complaint claims that in 2008, Weddington filed a false notice of exemption for BCLP, falsely stating registration with another regulator and that commodity futures trading was secondary to the Fund’s activities. The CFTC asserts that neither Weddington nor his companies were registered with any regulator, and the primary purpose of the Fund was speculation in commodity futures contracts.
Further charges detail fraud committed in 2010 and 2011. Weddington and his companies allegedly fabricated financial and trading records, purporting to demonstrate monthly profits from February 2010 to July 2011 generated by a proprietary algorithmic trading system. These falsified results were then provided to marketers soliciting funds from institutional investors. However, the CFTC alleges that the Fund actually lost money in trading during nearly every month within that same period.
The CFTC is seeking civil monetary penalties, trading and registration bans, and a permanent injunction against further violations of federal commodities laws as part of its ongoing litigation against Weddington and his companies. The case is being handled by Camille Arnold, Judith McCorkle, Michael McLaughlin, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard Wagner of the CFTC’s Division of Enforcement.
The CFTC reminds customers to be aware of the warning signs of fraud, particularly concerning commodity pools, and encourages reporting of suspicious activity via the toll-free hotline 866-FON-CFTC or online.
Source: CFTC.gov
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