Federal court orders Texas firm to pay $1.3M in commodity pool case

Civil penalty of $483,900 awarded

CFTC building CFTC building

The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Order against Defendants Jonathan Hansen (Hansen) and his firm, J. Hansen Investments, LLC (JHI), requiring them to jointly pay approximately $878,000 in restitution to defrauded investors and a civil monetary penalty of approximately $483,900. The Order also imposes permanent trading and registration bans against the Defendants and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.

The Consent Order of permanent injunction, entered by Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas, stems from a CFTC Complaint filed on August 24, 2012, against Hansen and JHI, charging them with fraud and misappropriation in the operation of a commodity pool scheme (see CFTC Press Release 6340-12). Hansen was the owner and sole employee of JHI, and neither defendant has ever been registered with the CFTC.

The Order finds that Hansen fraudulently solicited and accepted over $1.1 million from investors to trade E-Mini S&P 500 futures contracts in a commodity pool Hansen operated. Hansen used only a small portion of pool participants’ funds to trade futures contracts, transferring such funds to his personal or JHI’s futures trading accounts, both of which sustained consistent losses, according to the Order. The Order also finds that Hansen misappropriated funds for his personal use and commingled pool funds with his own funds. Additionally, Hansen issued monthly account statements to pool participants falsely reporting profits earned in pool participants’ trading accounts and monthly trading memoranda falsely reporting monthly and annual trading returns, according to the Order.

The CFTC appreciates the assistance of the National Futures Association.

CFTC Division of Enforcement staff members responsible for this case are Danielle E. Karst, George Malas, Christine Ryall, Paul G. Hayeck, and Joan Manley.

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