April 18, 2014

CFTC Charges New York Financial Advisor Wayne Pennoyer Weddington III and His Companies, Brunswick Capital and Brunswick Capital Partners, with Solicitation Fraud, Making False Statements, and Registration Violations in Connection with Operating a Commodity Pool

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed an enforcement action against Defendant Wayne Pennoyer Weddington III of New York, New York, and his companies, Brunswick Capital LLC (BCLLC), a Connecticut corporation, and Brunswick Capital Partners LP (BCLP), a Delaware corporation, charging them with solicitation fraud, making false statements, and registration violations in connection with a commodity pool that he formed called Pennoyer International Funds Global Opportunity LLC (the Pennoyer Fund). 

According to the CFTC Complaint, Weddington set up the Pennoyer Fund in 2007 to trade E-mini S&P 500 futures contracts and other index futures and made BCLLC the Fund’s operator and BCLP the Fund’s trading advisor.  CFTC Regulations require most such entities to register with the CFTC, but provide for some exemptions if the entities are registered with another regulator and the trading of commodity futures is incidental to the other activities of a fund.  The CFTC Complaint alleges that in 2008, Weddington filed a false notice of exemption for BCLP, claiming that he was registered with another regulator and that the trading of commodity futures contracts was incidental to the activities of the Fund.  In fact, neither Weddington nor his companies was registered with any regulator, and the central purpose of the Fund was to speculate in commodity futures contracts, according to the Complaint.

The Complaint further charges Weddington and his companies with fraud in 2010 and 2011, when Weddington and his companies created false financial and trading records that purported to show that they traded according to a proprietary algorithmic trading system that generated profits every month between February 2010 and July 2011.  The Defendants then allegedly hired marketers to solicit funds from institutional investors and provided these marketers the false trading results.  Furthermore, according to the Complaint, the Defendants lost money in trading virtually every month between February 2010 and July 2011.

In its continuing litigation against Weddington and his companies, the CFTC seeks civil monetary penalties, trading and registration bans, and a permanent injunction against further violations of the federal commodities laws, as charged.

CFTC Division of Enforcement Staff responsible for this case are Camille Arnold, Judith McCorkle, Michael McLaughlin, Joseph Konizeski, Scott Williamson, Rosemary Hollinger and Richard Wagner.

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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: April 18, 2014