Draven

Company: Draven, LLC

Fine: $1,800,000

Date: November 13, 2017

The Commodity Futures Trading Commission (CFTC) announced that Judge David G. Campbell of U.S. District Court for the District of Arizona entered a Consent Order against Defendants Derek Springfield and his company, Draven, LLC (Draven), both of Mesa, Arizona finding that they fraudulently solicited and received at least $1.8 million from approximately 112 commodity pool participants in connection with pooled investments in commodity futures and foreign currency exchange (forex). The Order, entered on November 13, 2017, also finds that the Defendants engaged in fraudulent sales practices, misappropriated pool participant funds, and provided false account statements to pool participants.

The Order finds that, from at least June 2012 through December 2016, the Defendants used Draven’s website, among other methods, to solicit potential pool participants to invest with Draven by telling them that their funds would be placed in segregated accounts and traded on their behalf by “institutional quality traders with extensive experience generating returns on the Futures, Forex and Options markets.” In reality, however, the Order finds that Defendants never traded pool participants’ funds in the manner advertised. Rather, Defendants pooled together the funds received from pool participants into two separate commodity pools. Defendants traded only a small percentage of the funds deposited into these pools. What trading was done on behalf of pool participants, according to the Order, was executed by Springfield through one or more trading accounts maintained in his name at various registered futures commission merchants and retail foreign exchange dealers. Springfield was not profitable in his trading of the trading accounts, and these accounts incurred net losses of approximately $195,880, according to the Order. In addition, Defendants deducted 10% management fees, based on profits, despite incurring net losses, the Order finds.

Parties:

  • Draven
  • Derek Springfield
  • Commodity pool

Details

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