A commodities trading fraudster who used Craig’s List to entice potential clients has been busted by the Commodities Futures Trading Commission (CFTC).
The CFTC made the announcement against Lon Olen Friedrichsen of Alton, Iowa, accusing him of acting as commodities trading advisor without registering, among a series of frauds.
“The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Southern District of New York, charging Lon Olen Friedrichsen of Alton, Iowa, with fraud and failing to register with the CFTC as a Commodity Trading Advisor,” The CFTC stated. as required. Friedrichsen, as alleged, also solicited clients under the names of Lon Kummer and Lon Richardson, but omitted that these were false names.
“The CFTC’s Complaint alleges that from at least December 16, 2014 through May 24, 2017, Friedrichsen fraudulently solicited clients in New York, New York and throughout the United States by making false statements in violation of the Commodity Exchange Act (CEA). Specifically, the Complaint alleges that Friedrichsen solicited clients for his fraudulent scheme via Craigslist ads, telephone, and e-mail. In these solicitations, the CFTC alleges that Friedrichsen made numerous materially false and misleading statements concerning his trading successes, omitted material facts, guaranteed future trading profits, and prepared false trading statements.”
Friedrichsen found potential investors on the popular website, Craig’s List, according to CFTC’s statement.
According to the complaint, he posted this advertisement on Craig’s List on September 23, 2015, “10% ROI [Return on Investment] daily!! I currently trade over $5 mil and am looking to expand up to $100mil. Do you want to make these kinds of returns?”
These claims proved false and misleading, according to CFTC’s complaint: “At the time Friedrichsen made this claim, and at all times during the Relevant Period, Friedrichsen was not consistently earning a 10% Return on Investment (‘ROI’) daily.” The CFTC noted. “For example, from approximately April 11, 2016 to May 9, 2016, Friedrichsen lost approximately $98,700 of $100,000, or 98.7%, of the funds he traded in futures contracts for Client A.”
The CFTC continued: “Friedrichsen advertised guaranteed returns of “10% net profit per day” when guaranteed returns are a fiction in futures trading. Despite making these statements, Friedrichsen omitted the fact that he did not make 10% net profits per day and frequently lost client funds when trading in their accounts.”
The CFTC further noted that guarantees are non-existent in commodities trading.
In this litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans.