The U.S. Commodity Futures Trading Commission (CFTC) filed a federal lawsuit charging Forward Investment Group, LLC (Forward) of Santa Monica, California, and its sole manager, Robert D. Bame of Moreno Valley, California, with committing commodity pool fraud.
U.S. District Court Judge R. Gary Klausner, in the U.S. District Court for the Central District of California, issued a restraining order prohibiting the defendants from destroying documents or denying CFTC staff access to books and records.
The CFTC complaint, filed August 26, 2008, the same day the order was issued, alleges that Forward and Bame provided to one or more pool participants or prospective participants a forged and false “daily” commodity trading statement purportedly issued by a futures commission merchant. The trading statement, as alleged, falsely indicated that the Forward account had a total net liquidating value of more than $77 million on December 14, 2007. However, the actual net liquidating value of the account on that date was $4,486, the complaint alleges.
The complaint also alleges that Bame willfully and fraudulently misrepresented to a staff member of the National Futures Association (NFA) the number and identities of the participants in the Forward pool enterprise, and that the enterprise only had $400,000 in cash contributions. As further alleged, Bame controls the commodity trading of the Forward account, which sustained trading losses of approximately $595,000 from February 2007 through May 2008.
The CFTC complaint seeks orders requiring the defendants to provide the CFTC with continuing access to books and records and to make an accounting to determine the actual amounts of net contributions and profits or losses. The CFTC also seeks court orders of preliminary and permanent injunction against the defendants, a return of allegedly ill-gotten gains, repayments to defrauded investors, and monetary penalties, among other relief.
The NFA has provided assistance in this matter.
The following CFTC Division of Enforcement staff members are responsible for the CFTC case: William P. Janulis, Ralph DerAsadourian, Cynthia Cannon, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
