CFTC pushes for stay of adversary proceeding against Forex Ponzi scammer
The United States Commodity Futures Trading Commission (CFTC) wants its adversary proceedings against John Glenn, an individual who played a key role in the Financial Tree scam, to be stayed. The regulator has submitted its motion for stay at the Bankruptcy Court for the District of Colorado.
The document, seen by FX News Group, explains that the Commission moves to stay further proceedings in the adversary proceeding pending the issuance of a default judgment against John Glenn in the CFTC’s fraud litigation against Glenn and others in the Eastern District of California.
While the CFTC expects a default judgment to issue in the Financial Tree Litigation in due course, to ensure efficient use of the Parties’ and Court’s resources, the CFTC proposes a stay of the adversary proceeding until Glenn’s liability is established.
On June 15, 2020, the CFTC filed a civil complaint against Glenn and his co-defendants alleging Glenn’s participation in a massive Ponzi scheme involving fraudulent solicitation of over 90 victims who contributed over $14 million to the scheme. Glenn was a licensed attorney who accepted victim funds in his attorney escrow account. Further, he made the investments appear safe as well as made false statements, material omissions, and misappropriated money from pool participants.
On November 4, 2021, the CFTC filed a motion for default judgment against Glenn and his co-defendants requesting that the Eastern District of California make findings of fact and conclusions of law regarding Glenn’s fraud and order Glenn to pay, jointly and severally with his defendant law firm, a civil monetary penalty of $856,314.72 as well as restitution, jointly and severally with all defendants, of $10,495,328.38.
The CFTC’s motion for default judgment remains pending.
On August 11, 2021, the CFTC timely filed the present adversary proceeding. The CFTC’s adversary proceeding complaint, which incorporated by reference the CFTC’s complaint in the Financial Tree Litigation, similarly alleges Glenn’s knowing and willful participation in a fraudulent Ponzi scheme, in which Glenn and his co-conspirators leveraged Glenn’s status as an attorney to convince victims that fraudulent investments were safe.
For example, the Adversary Complaint alleges that in March 2017, Glenn wrote a letter to pool participants on his law firm letterhead vouching for the safety of the commodity pools and falsely asserting he had never received a complaint about them—despite that on the very same day, Glenn had received just such a complaint.
In the adversary proceeding, the CFTC seeks a determination that the CFTC’s fraud-based claims against Glenn arising from the Financial Tree Litigation are non-dischargeable. In the event the Eastern District of California enters judgment against Glenn, the CFTC intends to amend its Adversary Complaint as well as its proofs of claim accordingly.