The buying and selling of precious metals, petroleum products, agricultural products, and other items is known as commodities trading. Commodities’ trading often involves futures and/or option contracts. Commodities fraud occurs when a commodity broker, financial advisor, or other party engage in illegal activities in the course of commodities trading (including commodities futures or options). A widespread form of commodities fraud is commodity pool fraud. Illegal activities involved in commodities fraud include:
Unauthorized Trading - engaging in transactions on an investor's account without consent from the investor.
Misrepresentation - making false statements about an investment. This frequently involves creating false statements on how profitable and how low-risk an investment is.
Nondisclosure - Where misrepresentation involves making false statements, nondisclosure is when information is withheld from an investor that he has a legal right to know. Failure to tell an investor that an investment may be substantially risky would be a case of nondisclosure.
Churning - Trading on an investor's account for the sole purpose of generating commissions, without regard for the best interests of the investor.
Misappropriation of Funds - using an investor's investment for anything other than the stated purpose. For example, taking money to purchase crude oil futures, but instead using the money to pay bonuses, would be an instance of misappropriation of funds.Do You Need A Commodities Fraud Attorney?
The Commodity Futures Trading Commission (CFTC) is the Federal agency that regulates commodities trading. They manage a reparations program for investors who are victims of commodities fraud and have suffered losses due to illegal conduct. Investors may seek to recover actual losses and filing costs, but only in certain circumstances can they seek punitive damages. Investors can choose to represent themselves, or may be represented by an attorney. The CFTC warns investors that neither the judge in a reparations hearing, nor any member of the CFTC staff, will investigate or litigate on any individual investor's behalf. The laws and regulations governing commodities fraud and commodities trading can be complex. You may need an attorney to ensure that your interests and legal rights are protected.
If you believe that you have been a victim of commodities fraud and would like a free case evaluation, please fill out the form below and tell us a little about your situation, and someone from our firm will contact you.