The order requires the defendants to pay restitution of $16.04m and a $30.88m civil monetary penalty for commodity pool fraud.
The order stems from a CFTC complaint filed on in August 2008, which charged Bame and Forward with, among other things, providing forged and false commodity trading statements to commodity pool participants that showed that the defendants had millions of dollars under management when they actually had misappropriated most of the $20m that participants invested.
In a prior permanent injunction order entered in March 2010, Judge found that Bame and Forward had violated various anti-fraud provisions of the Commodity Exchange Act by sending participants e-mail updates containing false information regarding their investments and their account value and by providing participants with false account statements.
Among other things, the order found that Bame diverted about $19m of investors’ money either to pay off other investors or for his personal use, such as purchasing automobiles or traveling in private jets.
In a related criminal proceeding, Bame pled guilty on in May 2009, to wire fraud and engaging in monetary transactions with property derived from specified unlawful activity.
