The Commodity Futures Trading Commission today announced it has filed a complaint in the U.S. District Court for the Eastern District of Michigan against Brian Mitchell of Michigan, Kevin Mack Jr. of Maryland, and their Michigan company, Young Pros Investment Group LLC. The complaint alleges the defendants fraudulently solicited and accepted approximately $1 million from roughly 33 participants of a commodity pool operated by YPIG. It also alleges Mitchell violated a prior CFTC administrative order.
In the complaint, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations, as charged.
According to the complaint, from about December 2020 through May 2022, Mitchell and Mack, individually, and as controlling persons of YPIG, fraudulently solicited and received funds from pool participants to trade commodity futures in a pool operated by YPIG. Their solicitation included misrepresentations about Mitchell’s trading success, false guarantees of profit and protections against loss, and failure to disclose the risks involved in futures trading.
The complaint alleges the defendants incurred losses in most months they traded on behalf of the pool. To conceal their losses, they allegedly issued false account statements and used funds from new participants to make Ponzi-type payments to earlier participants. The defendants also failed to register the pool with the CFTC, failed to register Mitchell and Mack as associated persons of the pool, failed to operate the pool as a separate entity, and commingled pool participants’ funds with their own, all in violation of CFTC regulations.
Mitchell is also accused of violating a CFTC order issued against him in 2021 for failing to register as a commodity trading advisor while providing commodity trading advice to more than 15 people. [See CFTC press release No. 8427-21]. As part of that order, he was prohibited from directly or indirectly trading on any CFTC-registered entity and engaging in any activities requiring CFTC registration for three years.
Despite that order, this complaint alleges from September 2021 through at least May 2022, Mitchell solicited funds to trade commodity interests, directed the trading activity, and acted as an associated person of the YPIG pool.The CFTC appreciates the assistance of the Maryland Office of the Attorney General, Maryland Securities Division, the FBI, and the U.S. Attorney’s Office for the Eastern District of Michigan.
The Division of Enforcement staff responsible for this case are Jason Gizzarelli, Karen Kenmotsu, George Malas, Chrystal Gonnella, Traci Rodriguez, and Paul G. Hayeck.
CFTC Fraud Advisories
The CFTC has issued several customer protection Fraud Advisories and Articles that provide information about how customers can detect, avoid, and report scams.
The CFTC strongly urges the public to verify a company’s registration with the CFTC at NFA BASIC before committing funds. If unregistered, a customer should be wary of providing funds to that entity.
Report suspicious activities or information, such as possible violations of commodity trading laws to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected, paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.
