The following is from the CFTC...
The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action charging defendant Feisal Sharif of Branford, Conn., with operating a commodity pool Ponzi scheme that solicited approximately $5.4 million from at least 50 people to invest in a commodity pool named First Financial, LLC. Sharif allegedly misappropriated at least $900,000 of pool participants’ funds, using the funds to pay personal expenses and purchase gifts. The CFTC complaint also charges Sharif with failing to register as a Commodity Pool Operator (CPO) of First Financial.
According to the complaint filed on November 26, 2012, in the U.S. District Court for the District of Connecticut, from at least January 2007 and continuing until September 13, 2012, Sharif, in order to entice prospective participants, guaranteed monthly and yearly returns of 1 percent to 15 percent on investments in the pool. Of the $5.4 million solicited from pool participants, at least $900,000 was misappropriated, approximately $1.32 million was lost trading futures in accounts in the name of First Financial, and $3.17 million was paid out to certain pool participants as fictitious “profits” or returns of principal, according to the complaint. Sharif allegedly admitted to one pool participant that he was operating a Ponzi scheme.
To falsely assure pool participants that their funds were safe in the pool’s trading accounts, Sharif allegedly fabricated trading account statements from First Financial and from futures commission merchants.
In its continuing litigation, the CFTC seeks civil monetary penalties, trading and registration bans, restitution, disgorgement, and a permanent injunction against further violations of the federal commodities laws.
The CFTC appreciates the cooperation of the Securities and Business Investments Division of the State of Connecticut Department of Banking, the Federal Bureau of Investigation, and the U.S. Attorneys’ Office for the State of Connecticut in this matter.
On September 14, 2012, in a related criminal action, the U.S. Attorney for the State of Connecticut charged Sharif with wire fraud.
The CFTC Division of Enforcement staff members responsible for this case are James Deacon, Amanda Harding, Jessica Harris, Kenneth McCracken, Rick Glaser, and Richard Wagner.