The US Commodity Futures Trading Commission says it has obtained Federal Court Orders requiring defendants Toby Hunter, Prestige Capital Advisors, and D2W Capital Management, all of Charlotte, North Carolina, together to pay more than $4.3 million in restitution to defrauded pool and managed account clients.
The Order also imposes civil monetary penalties of approximately $7.5 million. The judgment against Prestige and D2W and a Consent Order of Permanent Injunction against Hunter stems from a CFTC enforcement action filed September 6, 2011, charging the defendants with fraudulent solicitation, misappropriation, and regulation violations.
The Orders also impose permanent trading and registration bans against the Defendants and prohibit them from violating the anti-fraud and other provisions of the Commodity Exchange Act (CEA) and CFTC Regulations, as charged.
The Honorable Max Cogburn, Jr. of the US District Court for the Western District of North Carolina entered an Order of Default Judgment and Permanent Injunction against defendants Prestige and D2W on January 25, 2013, imposing civil monetary penalties of approximately $6.9 million on Prestige and $280,000 on D2W. The court entered a subsequent Order on February 22, 2013, requiring Prestige to pay restitution of over $4.1 million and D2W to pay restitution of $85,250.
The court found that Prestige fraudulently solicited and accepted more than $4.7 million from multiple pool participants for investment in one or more commodity pools that traded among other things, commodities and futures contracts.
The court specifically found that in soliciting pool participants, Prestige posted false trading returns on a website called BarclayHedge, where fund managers could post unverified historical returns for prospective clients to view, sent false trading results to at least one Prestige pool participant, and issued false account statements.
Furthermore, according to the Orders, approximately $2.3 million of pool participant funds was misappropriated by Prestige, and D2W, a managed forex account service, sent false account statements to at least one client.
Subsequently, on June 13, 2013, Judge Cogburn entered a consent Order of Permanent Injunction settling charges stemming from the same violations of the CEA and CFTC Regulations against Hunter. The Order requires Hunter to pay approximately $85,000 in restitution to D2W’s clients, $40,000 in restitution to Prestige pool participants, and also imposes a $280,000 civil monetary penalty.
Hunter was indicted by the U.S. Attorney’s Office for the Western District of North Carolina (Charlotte office) for criminal activity related to the Prestige matter.