Home Commodities CFTC Charges Florida Man with Fraudulent Solicitation of Over $800,000 and Misappropriation...

CFTC Charges Florida Man with Fraudulent Solicitation of Over $800,000 and Misappropriation in Futures Scheme

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Washington, D.C. – The Commodity Futures Trading Commission today announced that it filed a civil enforcement action in the Southern District of Florida against Rico Cox of Fort Lauderdale, Florida. The complaint alleges that, for a second time, Cox fraudulently solicited and accepted funds, this time at least $842,900 that was intended for commodity futures trading. Cox has never been registered with the CFTC.

In litigation, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA), as charged.

“Rico Cox is a recidivist fraudster who, despite a prior commodity fraud judgment against him, has again lied to participants about his experience and trading skill, and, in this case has stolen funds deposited with him for futures trading,” said CFTC Acting Director of Enforcement Gretchen Lowe. 

Case Background

The complaint alleges that, beginning in approximately December 2019 and continuing through the present, Cox persuaded at least 14 individuals to transfer at least $842,900 to him for the purported purpose of trading commodity futures. In reality, Cox misappropriated at least $367,979 of the participant funds for direct personal benefit.

The complaint alleges that Cox knowingly made fraudulent and material misrepresentations and omitted material facts in soliciting participants, including making false claims he was a successful trader with years of experience trading futures contracts.      

According to the complaint, Cox represented that he was profitably trading participants’ funds and sent participants false statements including account statements, emails, and screen shots falsely showing profitable trading. In fact, according to the complaint, Cox lost most of the participant funds that he did trade.

Cox also failed to disclose that he was the subject of a previous CFTC enforcement action in the Southern District of Florida which resulted in a $940,000 judgment against him for fraudulently soliciting funds to trade in a managed commodity futures account. [See CFTC Press Release No. 7383-16

The Division of Enforcement staff members responsible for this case are Cristina Covarrubias, Joseph J. Patrick, Venice M. Bickham, David A. Terrell, Scott R. Williamson, and Robert T. Howell.

CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories and Articles, including the Commodity Pool Fraud Advisory, which provides information about a type of fraud involving individuals and firms, often unregistered, offering investments in commodity pools. The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can 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 CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.

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