CFTC takes action against Long Leaf Trading Group
Long Leaf’s customers lost approximately $6.1 million trading due to the firm’s recommendations.
The United States Commodity Futures Trading Commission (CFTC) has taken action against Long Leaf Trading Group, Inc, its principals, Timothy M. Evans and James A. Donelson, as well as some of the firm’s employees and agents.
The CFTC filed its complaint with the Illinois Northern District Court on June 26, 2020. The document, seen by FinanceFeeds, alleges that, from at least June 2015 through December 2019 , Long Leaf Trading Group, Inc. at the direction of its principals Evans and Donelson, and through its agents and employees, including Jeremy S. Ruth and Andrew D. Nelson, engaged in a scheme to defraud customers in connection with options on futures contracts traded on designated contract markets in violation of the Commodity Exchange Act and accompanying Commission Regulations.
The defendants are alleged to have knowingly made numerous false and misleading statements to retail customers about the success of Long Leaf’s “Time Means Money” (“TMM”) options trading program. The defendants touted the success of the TMM program, claiming that it resulted in profits for customers. In reality, however, virtually all of Long Leaf’s customers lost money trading pursuant to the program.
The defendants knowingly or recklessly failed to disclose to, or deliberately withheld from, customers and prospective customers the material fact that substantially all customers lost money trading under the program.
During the relevant period, Long Leaf’s more than four hundred customers lost approximately $6.1 million trading pursuant to Long Leaf’s recommendations. These recommendations were designed primarily to generate commissions for Long Leaf. The firm made more than $4.4 million in commissions from its trade recommendations. These commissions accounted for more than 70% of customer losses.
The CFTC argues that, unless restrained and enjoined by the Court, the defendants are likely to continue to engage in the acts and practices alleged in the complaint or in similar acts and practices.
The Commission brings this action to enjoin the defendants’ unlawful acts and practices and to compel compliance with the Act and Regulations. In addition, the CFTC seeks civil monetary penalties and remedial ancillary relief, including, but not limited to, trading and registration bans, restitution, disgorgement, rescission, pre- and post-judgment interest, and such other relief as the Court may deem necessary and appropriate.
