CFTC charges commodity, crypto pool operator with $14M fraud

The US Commodity Futures Trading Commission has sued a North Carolina man, accusing him of operating a commodity pool featuring crypto that defrauded investors of more than $14 million.

The CFTC’s lawsuit, filed in federal court on Tuesday, alleged that Trevor Vernon and his company, Argent Capital Management, operated a commodity pool featuring equity index futures, options on equity index futures and crypto.

The agency alleged that from March 2022 to February 2026, Vernon solicited $14.8 million from at least 60 investors and falsely claimed he was a successful trader, even though his trading actually “resulted in consistent and catastrophic losses” for the pool’s investors.

The lawsuit is a rare crypto-related enforcement action from the CFTC, which is angling to oversee the crypto industry while facing questions from some lawmakers about whether it has the resources to police the complicated and rapidly growing sector.

The agency alleged that as part of the scheme, Vernon traded crypto, including Bitcoin (BTC) and Ether (ETH), which the CFTC asserted were commodities.

CFTC alleges Vernon ran pool “akin to a Ponzi scheme”

The CFTC alleged in its complaint that Vernon made false statements to existing and potential investors, including in quarterly account updates and monthly performance emails.

The agency claimed Vernon’s trading of crypto, as well as futures and options on stock indices, resulted in losses of more than $8.6 million.

Related: CME Group sues CFTC over crypto perpetual futures 

The CFTC said Vernon never disclosed the losses to investors and alleged he misappropriated $3 million to pay investors “in a manner akin to a Ponzi scheme” to hide his losses. He also allegedly misappropriated $136,000 for private air travel, according to the lawsuit. 

The CFTC accused Argent Capital Management of failing to register with the agency as required by federal commodities law, and claimed Vernon made false statements to the regulator in January about the issues alleged in its complaint.

The CFTC charged Vernon with seven counts related to fraud, failure to register and making false statements.

It asked the court to permanently ban Vernon from registration and trading, along with disgorgement, penalties and restitution.

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