AUSTIN (Legal Newsline) - A federal court in Texas on Aug. 24 ordered a default judgment of nearly $17 million against an alleged Texas commodity pool trader.
The order was entered in the U.S. District Court for the Western District of Texas. It stems from a Commodity Futures Trading Commission complaint filed on Feb. 2 charging Christopher Cornett of Buda, Texas, with fraudulent solicitation fraud, issuing false account statements, embezzlement and failing to register as a commodity pool operator.
He will have to pay $10.16 million in restitution and a $6.78 million civil monetary penalty in connection with his alleged foreign currency pooled investment fraud.
The order also imposes permanent trading and registration bans against Cornett. Law enforcement officials from Canada and the British Virgin Islands participated in the investigation.
Cornett allegedly solicited prospective participants to invest in a pooled foreign exchange investment and acted as the manager and operator of the pool from at least June 2008 through at least October 2011, according to the order.
Cornett allegedly lost approximately $4.17 million of the pool's funds trading foreign exchange. Cornett solicited approximately $7.07 million from pool participants, and participants redeemed approximately $1.64 million from June 18, 2008 through September 2010, the CFTC said.
He had only one profitable month trading foreign exchange and earned little, if any, fees for acting as the pool's operator, the CFTC said.