The US Commodity Futures and Trading Commission (CFTC) said it has filed a civil lawsuit in a New York district court against Brett G. Hartshorn of Sarasota, Florida. The watchdog accuses Hartshorn of fraudulently soliciting and/or managing at least $906 000 from retail clients to invest in off-exchange foreign currency (forex) and misappropriating at least $57 414 of client funds for his own personal benefit.
CFTC also accuses Hartshorn of failing to register with it as a Commodity Trading Advisor (CTA), as required by the Commodity Exchange Act and CFTC Regulations.
After an investigation with the help of the Sarasota office of the FBI and UK’s Financial Conduct Authority, the CFTC accuses Hartshorn that between June 2008 and 2014 he solicited at least 13 retail clients to invest in off-exchange forex and let him trade forex on their behalf. He met his victims at church or in his local community. He allegedly told them he was a profitable forex trader and promised them substantial profits if they let him trade on their behalf.
According to the CFTC, however, Hartshorn was lying – he did not tell his potential clients that his trading strategies were risky and he frequently had significant, single-day losses. He also failed to inform them that under a “profit sharing arrangement” he could be compensated despite the significant client losses. Furthermore, Hartshorn allegedly took client funds for his own benefit and did not tell his clients.
In its litigation against Hartshorn the CFTC seeks restitution to defrauded customer, disgorgement of ill-gotten gains, a civil monetary penalty, permanent trading and registration bans, and a permanent injunction against further violations of federal commodities laws, as charged.