Federal court sanctions commodity pool $46.9M

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court order imposing more than $46.9 million in restitution and civil monetary penalties on Robert D. Bame of Moreno Valley, Calif., and his firm, Forward Investment Group, LLC (Forward) of Santa Monica, Calif. The order requires the defendants to pay restitution of $16,038,568.68 and a $30,887,006 civil monetary penalty for commodity pool fraud.

The order, entered by Judge R. Gary Klausner of the U.S. District Court for the Central District of California, stems from a CFTC complaint filed on August 26, 2008. The CFTC complaint charged Bame and Forward with, among other things, providing forged and false commodity trading statements to commodity pool participants that showed that the defendants had millions of dollars under management when they actually had misappropriated most of the $20 million that participants invested (see CFTC Press Release 5539-08, September 3, 2008).

In a prior permanent injunction order entered on March 18, 2010, Judge Klausner found that Bame and Forward had violated various anti-fraud provisions of the Commodity Exchange Act by sending participants e-mail updates containing false information regarding their investments and their account value and by providing participants with false account statements. Among other things, the order found that Bame diverted about $19 million of investors’ money either to pay off other investors or for his personal use, such as purchasing automobiles or traveling in private jets.

In a related criminal proceeding, Bame pled guilty on May 29, 2009, to wire fraud and engaging in monetary transactions with property derived from specified unlawful activity (U.S. v. Bame, 08-1368(A) JFW (C.D. Ca.)). Bame was ordered to pay restitution of $16,038,568.68, an amount equal to the restitution entered in the CFTC order. Bame is currently serving a 97-month prison sentence.

The CFTC thanks the National Futures Association, the U.S. Attorney’s Office for the Central District of California and the Federal Bureau of Investigation for their assistance.

CFTC Division of Enforcement staff responsible for this case are William P. Janulis, Ralph DerAsadourian, Cynthia Cannon, Scott Williamson, Rosemary Hollinger and Richard B. Wagner.

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