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CFTC charges Chicago-based trader Bradley Schiller with USD7.8m commodity fraud

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The US Commodity Futures Trading Commission (CFTC) has filed a complaint in the US District Court for the Northern District of Illinois, charging Bradley Scott Schiller of Chicago, Illinois, with solicitation fraud, misappropriating investors’ funds, and issuing false statements in connection with soliciting at least USD7.8 million from at least six investors to trade commodity futures contracts in managed accounts.

Specifically, the CFTC complaint alleges that since at least January 2008 to at least February 2012, in soliciting investors and throughout the course of the investment scheme, Schiller lied about his success as a trader and used altered account statements to bolster his claims. His actual trading in the accounts, however, resulted in net trading losses, and, when his investors demanded the return of their funds, Schiller put them off until he could solicit funds from new investors. Schiller then used much of the funds he obtained from the new investors to pay back his old investors.

However, according to the complaint, of the at least USD7.8 million Schiller received since January 2008, he deposited only approximately USD3.7 million of those funds into trading accounts, lost approximately USD1.6 million in trading, and withdrew over USD2.1 million from the trading accounts, leaving near zero balances in the accounts. Schiller misappropriated investor funds to support “a lavish lifestyle,” purchasing expensive automobiles, a pricy, high-rise condominium, and paying personal expenses, according to the complaint. He also allegedly used at least USD3.5 million of investor funds to repay two of his early investors and still owes four of his investors at least USD4.35 million.

In its continuing litigation against the defendant, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, a civil monetary penalty, trading and registration bans, and permanent injunctions against further violations of federal commodities laws.
 

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