The United States Commodity Futures Trading Commission (CFTC) and William S. Evans, III, a defendant in a lawsuit over a $10 million fraudulent scheme, appear to be close to settling a case that started in May 2021. This becomes clear from a status report recently filed by the CFTC in the Kentucky Eastern District Court.
The document, seen by FX News Group, says that the parties in the case have reached an agreement in principle to resolve this litigation as between them that the Division is prepared to recommend to the Commission. The Parties are finalizing their agreement and anticipate filing a proposed consent order for the Court’s consideration in the near term.
Let’s recall that the CFTC has charged William S. Evans III (d/b/a Turning Point Investments) with fraud in connection with soliciting clients to trade S&P commodity futures contracts and options in a commodity pool while failing to register with the CFTC.
The CFTC complaint alleges that since at least September 2018, Evans accepted at least $10 million from clients of which he misappropriated at least $8.4 million. Evans allegedly paid some clients with non-existent profits in the manner of a Ponzi scheme while diverting other funds for his personal use. Although Evans promised participants that they would enjoy double-digit profits, the transactions he engaged in resulted in losses he failed to disclose.
The complaint further alleges that Evans acted in a capacity requiring him to register with the CFTC as a commodity pool operator but failed to do so.
In its continuing litigation, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, and an imposition of a permanent injunction against further violations of the Commodity Exchange Act, as charged, as well as permanent trading and registration bans.