February 27, 2012
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against James Giacomo Brandolino, previously of Joliet, Ill., for conducting a number of fraudulent commodity futures investment schemes and misappropriating customer funds.
The CFTC order requires Brandolino to pay a civil monetary penalty of $1 million and permanently bans him from trading on or subject to the rules of any CFTC-registered entity. The order also requires Brandolino to comply with certain undertakings, including never applying for registration with the CFTC.
The order finds that from at least July 2006 to January 2011, Brandolino accepted approximately $3.6 million from pool participants, including family, friends, and community members, to invest in managed accounts and commodity futures pools that he and his entities operated. When soliciting and accepting participant funds, Brandolino misrepresented the performance of the pools, issued false periodic statements to pool participants that failed to disclose significant trading losses, and misrepresented the value of pool participants’ interests in the pools, according to the order.
Of the approximately $3.6 million received from pool participants, Brandolino misappropriated about $1 million for his own personal purposes, lost approximately $781,000 trading futures, and used about $1.3 million to pay back principal and purported profit to participants, as is typical of a Ponzi scheme, according to the order. The order finds that Brandolino used customers’ misappropriated money to purchase a BMW and a Rolex watch and for down payment on a condominium in Greece. Brandolino used false account statements sent to pool participants to hide the misappropriation, according to the order.
On January 18, 2011, in a related criminal action brought by the U.S. Attorney’s Office for the Northern District of Illinois, Brandolino was charged with mail fraud. Brandolino pleaded guilty on August 9, 2011, and is currently in federal custody awaiting sentencing.
CFTC Division of Enforcement staff members responsible for this case are David Chu, Lindsey Evans, Mary Beth Spear, Ava M. Gould, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Last Updated: February 27, 2012