Steubenville, Ohio resident William Thomas Caniff, along with Arie Bos of Rotterdam, Netherlands, and their company Berkley Capital Management, LLC (BCM), are facing charges of fraud following a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC) on May 3, 2019. Also named in the complaint are two investment pools operated by BCM: BBOT 1, LP (BBOT) and Berkley II, LP (Berkley II).
The CFTC alleges the defendants fraudulently solicited over $4.8 million from 62 investors to trade binary options through the North American Derivatives Exchange (NADEX) in Chicago, Illinois. However, a significantly small portion of the funds – approximately $85,000 – was actually used for trading. At least $2.3 million of the investor funds were allegedly misappropriated, creating a shortfall exceeding $2.5 million owed to participants.
The complaint further accuses Caniff of providing a false statement to NADEX, concealing his criminal history to secure a pool account. Bos is charged with issuing false statements to investors, including inflated profit claims for both BBOT and Berkley II. Specifically, Bos allegedly reported profits for BBOT during months the account wasn’t funded and falsely claimed a Berkley II account existed at NADEX.
According to the CFTC, Caniff and Bos began operating BCM in January 2016, soliciting investments from individuals in both the Netherlands and the United States. While investors contributed over $4.8 million, Caniff reportedly used $2.3 million to repay earlier investors and paid himself and Bos approximately $2.3 million in management fees.
On May 1, 2019, Judge Robert M. Dow, Jr. of the U.S. District Court for the Northern District of Illinois issued a Statutory Restraining Order, freezing the assets of Caniff, Bos, BCM, BBOT, and Berkley II. The order also prohibits the defendants from destroying relevant financial records. A hearing on the CFTC’s motion for a preliminary injunction is scheduled for May 22, 2019.
“As this case shows, the CFTC continues its commitment to rooting out fraud in our markets,” stated James McDonald, the CFTC’s Director of Enforcement. “As alleged here, the defendants perpetrated their fraud by lying to the exchange, lying to customers, and pocketing millions of dollars in customer funds, instead of trading them for customers as promised.”
Source: CFTC.gov
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