Brooklyn resident Yehuda Belsky has been ordered to pay $1.35 million in restitution and penalties for defrauding investors through his commodity pool operation, Innovative Capital Management, LLC. The U.S. Commodity Futures Trading Commission (CFTC) filed and settled charges against Belsky and his firm on December 19, 2008, alleging fraud, false filings, and misappropriation of customer funds.
According to the CFTC’s order, between September 2006 and February 2008, Belsky and Innovative fraudulently secured $1.25 million from five commodity pool participants. Instead of investing the funds as promised—in commodity futures and options contracts—they misappropriated at least $385,000. The remaining funds were not appropriately invested.
Belsky and Innovative further compounded the fraud by creating and distributing false commodity pool account statements to investors. These statements misrepresented the net asset value and monthly rates of return, misleading participants about the performance of their investments. During an audit by the National Futures Association (NFA), Belsky submitted additional fraudulent documents, including fabricated account statements and bank statements designed to inflate the apparent balance of the pool’s funds.
The CFTC order mandates that Belsky and Innovative, jointly and severally, pay $1,250,000 in restitution to the defrauded pool participants and a $100,000 civil monetary penalty. Additionally, both Belsky and Innovative are permanently banned from engaging in commodity trading and are prohibited from applying for registration with the CFTC in the future. The case was aided by assistance from the NFA.
The CFTC’s enforcement team included Philip Rix, Joseph Rosenberg, Elizabeth Brennan, Steven Ringer, Lenel Hickson, and Vincent A. McGonagle.
Source: CFTC.gov
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