CFTC secures $2.5m judgment against operator of fraudulent commodity pool scheme

Maria Nikolova

The order requires Richard D. Carter, principal of Blue Guru, to pay restitution totaling $838,642 and a civil monetary penalty of $1.76 million.

The United States Commodity Futures Trading Commission (CFTC) has just announced that it has obtained a $2.5 million order against Richard D. Carter in connection with a $1.76 million commodity pool fraud operated by Blue Guru, LLC. The Northern District of Illinois entered a Consent Order for Permanent Injunction on January 8, 2020, against Carter.

According to the order, Carter will have to pay restitution totaling $838,642 and a civil monetary penalty of $1,760,022. The order also imposes permanent trading and registration bans on Carter and prohibits him from violating provisions of the Commodity Exchange Act (CEA).

Let’s recall that, on January 12, 2018, the CFTC charged Carter, co-defendant Mark R. Slobodnik, and Blue Guru, LLC with fraud, misappropriation, and failing to register with the CFTC.

The order finds that from April 2014 to January 2018, Carter misrepresented material facts to Blue Guru pool participants and prospective pool participants concerning the profitability of their participation interests in the commodity pool. Carter misleadingly claimed that pool funds would be used to trade futures, including the Dow Jones E-mini and the S&P 500 E-mini contracts on the CME, but, in reality, the defendants used less than two-thirds of the $1.76 million they received for trading.

Carter also informed prospective participants that they would earn 8% per year on their investment plus 50% of any gross net trading profits, and he issued false account statements reflecting illusory quarterly gains. In fact, Blue Guru incurred more than $500,000 in trading losses, half of which Carter directly caused.

Further, the order finds that Carter misappropriated $586,674 of participants’ funds, ignored withdrawal requests, and lied about conditions that purportedly prevented defendants from making disbursements.

On November 13, 2018, the court entered a consent order of permanent injunction against defendant Slobodnik, requiring him to pay restitution of $280,000, disgorgement of $45,342, and a civil monetary penalty of $45,342. On May 1, 2018, a default judgment was entered against Blue Guru, ordering it to pay restitution of $1.4 million, disgorgement of $1.4 million, and a civil monetary penalty of $4.2 million.

On August 27, 2019, Carter pleaded guilty to wire fraud in a related criminal proceeding. He is scheduled to be sentenced on February 13, 2020.

Unfortunately, orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets.

Read this next

Executive Moves

GCEX hires American Express’ veteran Marilu Revelli as marketing director

GCEX, a digital asset and FX technology platform for institutional and professional clients, has appointed Marilu Revelli to the role of Marketing Director.

Crypto Insider lists DeFiChain’s DFI token amid growing popularity

Bitcoin-based DeFi platform DeFiChain announced the listing of its native DFI token on, one of the world’s leading cryptocurrency exchanges.

Digital Assets

Binance in discussions with Japan regulators to relaunch operations

Binance, the world’s largest crypto exchange by traded volume, is reportedly seeking a license to operate in Japan after its exit from the country four years ago.

Digital Assets

OKX Chain integrates .crypto domains to simplify wallet transactions

Unstoppable Domains, a company building Blockchain domain names, has entered a partnership with EVM and IBC compatible chain OKC (OKX Chain). This collaboration will grant OKC’s users the ability to simplify deposits and withdrawals within the regulated fiat-focused crypto-asset exchange.

Retail FX, Technology

MetaTrader’s iOS issue opens brokers’ eyes to other trading platforms

In a surprising (or-not-so-surprising) move, Apple has removed MetaTrader 4 and MetaTrader 5 from its App Store in a huge blow for the leading FX trading platform provider.

Retail FX

Pepperstone adds analytics and automated trading tools free of charge

“We look forward to bringing significant value to Pepperstone traders and making a real, positive impact in their daily trading habits. We are excited to welcome them on board.”

Retail FX

FP Markets wins Best Global Value Broker for 4th consecutive year at the 2022 Global Forex Awards

“We greatly appreciate the continued international recognition as at FP Markets we pride ourselves on these attributes and these prestigious awards are testament to the hard work from our global team to always provide our clients with the ultimate trading experience.”

Inside View

How to Engage Your Customer at Every Stage of Their Journey

As many as 89% of successful businesses say that providing assistive customer experiences is critical to their growth. That’s because a mere 5% increase in customer retention can boost profits by 25% to 95%.

Industry News

CFTC fines Chinese firms Chinatex and COFCO $720,000 for wash trading

Chinatex traders engaged in wash trading in order to liquidate a long position in the account of an affiliated company and re-establish the position in its own account, to the ultimate benefit of its parent company, COFCO.