June 27, 2019
Commodity Pool and its President Ordered to Pay $1.2 Million, Banned from Markets for Futures Fraud
Washington, DC – The Commodity Futures Trading Commission (CFTC) announced today that a Virginia federal court has entered a Consent Order (Order) resolving a CFTC action against defendants The Kane Capital Investment Group, LLC and its President, Amrit Jaswant Singh Chahal (together, defendants), both of Virginia. The Order results from a CFTC Complaint charging the defendants with commodity futures fraud, commodity pool fraud, registration violations, and illegally commingling funds (see CFTC Complaint and Press Release 7712-18, dated April 13, 2018).
The Order requires the defendants to pay $1,232,510.41 in restitution and imposes permanent trading and registration bans as well as prohibiting Chahal from further violations of the Commodity Exchange Act (CEA) and CFTC Regulations. The Order provides that the restitution obligation is deemed satisfied by entry of a criminal forfeiture judgment of an equal or greater amount in the case of United States v. Amrit Jaswant Singh Chahal, Case No. 1:18-cr-00152-LMB (E.D. Va. 2018) (the Criminal Action).
According to the Order, from at least January 1, 2015, through December 31, 2017, the defendants fraudulently solicited and misappropriated customer funds in connection with offers to trade E-mini NASDAQ 100, E-mini S&P 500, Cboe Volatility Index, and NYMEX WTI Light Sweet Crude Oil futures contracts, among others. The Order further finds that the defendants’ trading was on balance unprofitable, causing deep losses that they attempted to conceal by making material misrepresentations and omissions to pool participants. For example, the defendants touted annual averaged trading profits of between 28% and 34%, and sometimes higher, despite knowing at the time that Kane Capital made no profits and was suffering losses. Chahal also doctored trading account statements for the purpose of concealing losses and attracting additional pool participants.
The Order also finds that the defendants misappropriated pool funds by using new deposits to make Ponzi scheme-like payments to certain pool participants and by using the funds to pay Chahal’s personal expenses, including his rent, utility, and credit card bills.
Related Criminal and SEC Actions
On November 2, 2018, Chahal pleaded guilty to wire fraud and commodities fraud charges in the Criminal Action. On March 15, 2019, the Court sentenced Chahal to 30 months in federal prison and entered an Amended Preliminary Order of Forfeiture requiring him to pay a criminal forfeiture judgment in the amount of $1,232,510.41.
In addition to the Criminal Action, the U.S. Securities and Exchange Commission (SEC) has charged Chahal in a related enforcement action. See SEC v. Amrit J.S. Chahal, Case No. 1:18-cv-00426 (E.D. Va. 2018).
The CFTC appreciates the assistance of the U.S. Attorney for the Eastern District of Virginia, the Virginia State Corporation Commission, and the SEC Division of Enforcement.
CFTC Division of Enforcement staff members responsible for this action are Daniel J. Grimm, Dmitriy Vilenskiy, Jonah E. McCarthy, Christine Ryall, Richard P. Foelber, Paul G. Hayeck, and former staff member John Einstman.