CFTC Sues Iowa Money Manager for Fraud

The U.S. Commodity Futures Trading Commission has filed an enforcement ‎action in New York federal court against an Iowa-based money manager ‎accused of soliciting clients for his fraudulent scheme via Craigslist ads, the ‎agency said Monday.‎

Discover credible partners and premium clients at China’s leading finance event!

According to the complaint, Lon Olen Friedrichsen solicited the ‎money from several unsuspecting investors by guaranteeing participants a ‎monthly return on their investments based on profits purportedly earned ‎from commodity trading. The commission is seeking a court order to force ‎Friedrichsen to disgorge ill-gotten gains and pay a fine.‎

Clients gave Friedrichsen the power to trade in their accounts as he ‎fraudulently induced them claiming to be fit and proper. One client gave him ‎‎$100,000 as he as claimed 10% per day returns provided that they would ‎split the profits 50/50 every week.

The CFTC alleges that beginning in December 2014 and continuing through ‎to May 2017, the defendant conspired to defraud investors by enticing them ‎to participate in his asset management services.‎

To create the illusion of stability, he allegedly prepared and distributed false ‎account statements to fund participants, telling investors that his strategy ‎offered a safe investment with steady and guaranteed returns, according to ‎the complaint.‎

As a result, at least 12 participants gave Friedrichsen a total of ‎‎$400,000 to trade in their personal commodity futures accounts held at ‎Futures Commission Merchants. He lost $161,000 of his clients’ ‎funds, and raked in a total of $45,369 in fees.‎

In connection with the promotion of his service, ‎the unregulated money manager made a ‎series of materially false claims through various ‎means, including a website, social media, newsletters ‎and verbal communications.‎

He also allegedly utilized promotional materials that ‎showed trading returns based on hypothetical results, ‎without including the required disclosure language.‎

The CFTC has asked the court to provide full restitution to defrauded ‎investors, disgorgement of ill-gotten gains and to pay the appropriate civil ‎monetary penalties. In addition to fiscal claims, the agency seeks permanent ‎registration and trading bans and a permanent injunction from future ‎violations of federal commodities laws.‎

Source: Read Full Article

Leave a Reply