Overview
- The CFTC filed a civil complaint Tuesday in U.S. District Court for the Western District of North Carolina charging Trevor L. Vernon and Argent Capital Management with running a commodity pool that solicited more than $14 million from over 60 participants.
- The agency alleges the pool produced more than $8.6 million in trading losses while investors received fabricated monthly and quarterly performance reports showing gains that did not exist.
- The complaint says roughly $3 million of new investor funds were used to pay existing participants in a Ponzi-like manner and about $136,000 was spent on private air travel from pool money.
- Regulators also accuse Vernon of making false statements under oath and of failing to register the operation as required under the Commodity Exchange Act, and they ask the court for restitution, disgorgement, civil penalties, and trading and registration bans.
- The filing treats Bitcoin and Ether as commodities in this case, adding to a pattern of CFTC enforcement of crypto-linked pooled trading, and investors’ recoveries will depend on the outcome of the pending civil litigation.