September 23, 2014

CFTC Charges Ohio Resident John R. Bullar and his Company, Executive Management Advisors L.L.C., with Fraud and Embezzlement in Operating an $8.3 Million Commodity Pool and Ponzi Scheme

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed a federal civil enforcement action in the U.S. District Court for the Southern District of Ohio against Defendants John R. Bullar, who resides in Cincinnati, Ohio, and Executive Management Advisors L.L.C., a company organized in Ohio and of which Bullar was the sole principal. The CFTC Complaint charges that the Defendants, while acting as Commodity Pool Operators (CPOs) and Commodity Trading Advisors (CTAs), fraudulently solicited over $8.3 million from at least 40 investors for pooling and trading in futures and options; provided participants with false account statements; embezzled and misappropriated participants’ funds; and acted as CPOs and CTAs while failing to register as such with the CFTC.

The CFTC Complaint alleges that the Defendants represented to participants that their funds would be pooled in a managed account to trade commodity futures and options contracts on designated contract markets. However, according to the Complaint, only a fraction of the participants’ funds was traded. Instead, as alleged, the Defendants operated a Ponzi scheme and misappropriated and embezzled approximately $6 million of participants’ funds. Bullar used these funds to pay his personal expenses, make cash withdrawals, issue checks to himself, and transfer money to his personal accounts or accounts that he controlled, according to the Complaint.

The CFTC Complaint further alleges that the Defendants misrepresented and omitted material facts to pool participants by intentionally or recklessly (1) failing to disclose that most of the participants’ funds would not be invested and traded, (2) failing to disclose that Defendants were misappropriating and embezzling participants’ funds, (3) providing participants with false account statements showing fictitious profits and account balances and concealing trading losses, and (4) failing to disclose that pool participant funds were being used to pay certain pool participants their fictitious trading profits and/or balances as reported on false account statements for such participants.

In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and permanent injunctions from further violations of the federal commodities laws, as charged.

The CFTC thanks and acknowledges the assistance of the United States Attorney’s Office for the Southern District of Ohio, the Internal Revenue Service (Cincinnati Field Office), the Ohio Department of Commerce (Division of Securities-Enforcement), and the Office of the Hamilton County Prosecuting Attorney.

CFTC Division of Enforcement staff members responsible for this action are Xavier Romeu-Matta, Christopher Giglio, Douglas K. Yatter, Steven Ringer, Lenel Hickson, Jr., and Manal M. Sultan.

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CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

Media Contact
Dennis Holden
202-418-5088

Last Updated: September 23, 2014