CFTC secures Court order for $5.8M in restitution from Long Leaf Trading Group
The Commodity Futures Trading Commission (CFTC) has secured a Court order granting its motions for partial summary judgment against fraudulent trading scheme Long Leaf Trading Group.
On July 27, 2022, the Honorable Thomas M. Durkin of the Illinois Northern District Court signed an order granting the CFTC’s motions for partial summary judgment against James Donelson, Jeremy Ruth, and Long Leaf Trading Group.
Long Leaf is ordered to pay $5,767,145 in restitution and $4,010,994 in disgorgement.
Donelson shall be considered jointly and severally liable with Long Leaf for $2,376,738 in restitution and $1,235,413 in disgorgement. Any amount owed by a party in disgorgement shall be offset by all sums paid toward restitution.
Ruth is ordered to pay $301,541.39, constituting both restitution and disgorgement.
The CFTC alleges that Long Leaf was a boiler room that skirted registration and regulatory requirements and cheated and defrauded substantially all of its clients over its approximately five-year existence. Long Leaf did not register as a CTA and it did not provide customers with the required disclosure document.
In addition to its registration and regulatory violations, Long Leaf defrauded its customers through a scheme that spanned the ownership of both Defendant Timothy Evans (2015–November 2017) and Donelson (December 2017–December 2019). The fraud generally took the form of misrepresentations about the company’s performance, the qualifications of its management, and omissions of track record information— all of which are items that courts have long held are material as a matter of law in this context.
Long Leaf’s misrepresentations and omissions were memorialized in pitch scripts and other solicitation materials that were used by Long Leaf’s broker staff as they sat each day cold-calling hundreds of potential customers.
Customers who participated in the trading program sustained losses totaling $5,767,145.