The Commodity Futures Trading Commission (CFTC) today announced that it filed a civil enforcement action in the Southern District of Florida against recidivist fraudster Rico Cox.
The complaint alleges that, for a second time, Cox fraudulently solicited and accepted funds, this time at least $842,900 that was intended for commodity futures trading. Cox has never been registered with the CFTC.
In litigation, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA), as charged.
The complaint alleges that, beginning in approximately December 2019 and continuing through the present, Cox persuaded at least 14 individuals to transfer at least $842,900 to him for the purported purpose of trading commodity futures. In reality, Cox misappropriated at least $367,979 of the participant funds for direct personal benefit.
Further, the complaint alleges that Cox knowingly made fraudulent and material misrepresentations and omitted material facts in soliciting participants, including making false claims he was a successful trader with years of experience trading futures contracts.
According to the complaint, Cox represented that he was profitably trading participants’ funds and sent participants false statements including account statements, emails, and screen shots falsely showing profitable trading. In fact, according to the complaint, Cox lost most of the participant funds that he did trade.
Cox also failed to disclose that he was the subject of a previous CFTC enforcement action in the Southern District of Florida which resulted in a $940,000 judgment against him for fraudulently soliciting funds to trade in a managed commodity futures account.