The US Commodity Futures Trading Commission (CFTC) has filed and simultaneously settled charges that Robert S. Moss, of Charlotte, NC, fraudulently solicited more than USD3 million from 22 individuals to trade options on commodity futures through a commodity pool. Moss has never been registered with the CFTC.

The CFTC order finds that, from at least 2001 through 2008, Moss misrepresented his past trading performance to pool participants and sustained trading losses. Moss also misappropriated at least USD1.5 million of the pool participants’ funds for personal and household expenses and to pay the mortgage on his residence, the order finds. Moss used participants’ funds to repay other participants, as is typical of a Ponzi scheme, the order finds. Moss concealed his trading losses and misappropriation by issuing false statements to certain pool participants, according to the order.

Furthermore, the order finds that Moss failed to register as a Commodity Pool Operator with the CFTC and to operate the pool as a separate legal entity, commingled pool funds, and failed to provide pool participants with required disclosure documents.

The CFTC order requires Moss to pay USD1,501,151.29 in restitution to defrauded participants and a USD500,000 civil monetary penalty. The order also permanently bans Moss from any commodity-related activity, including trading and registering with the CFTC.