CFTC goes after Centurion Capital Management
The United States Commodity Futures Trading Commission (CFTC) has filed a complaint against Centurion Capital Management, Inc and its principal, Terry Michael Svejda. The document, seen by FX News Group, was submitted on August 16, 2021, at the Nebraska District Court.
The complaint alleges that, beginning in approximately 2012, and continuing through the present , Centurion, by and through its principal, Terry Michael Svejda, and Svejda directly, fraudulently solicited and received at least $790,050 from at least 27 individuals to invest in a commodity pool, Decadian, LLC. Throughout the Relevant Period, Svejda told pool participants that he would use pool funds to trade exchange-traded commodity futures contracts.
Instead, the defendants misappropriated approximately 80% of pool participant funds.
According to the CFTC, by this conduct, the defendants engaged, are engaging in, and/or are about to engage in acts and practices in violation of Sections 4b(a)(1)(A) and (C), and 4o(1)(A) and (B), of the Commodity Exchange Act (the “Act”), 7 U.S.C. §§ 6b(a)(1)(A), (C) and 6o(1)(A), (B) (2018).
In connection with its solicitations on behalf of the Decadian commodity pool, and its operation of the pool, Centurion was required to register with the Commission as a Commodity Pool Operator (CPO), and Svejda was required to register as an Associated Person (AP) of Centurion. However, throughout the Relevant Period, Centurion and Svejda failed to so register, in violation of Sections 4m(1)(A) and 4k(2) of the Act, 7 U.S.C. §§ 6m(1)(A) and 6k(2) (2018).
Further, Commission Regulations prohibit CPOs from commingling pool participant funds with funds belonging to any other person. Moreover, CPOs are required to provide pool participants with Disclosure Documents in a form specified by the Commission. Throughout the Relevant Period, Centurion commingled pool participant funds, and failed to provide Disclosure Documents, in violation of Regulations 4.20(c) and 4.21(a)(1), 17 C.F.R. §§ 4.20(c) and 4.21(a)(1) (2020).
According to the regulator, unless restrained and enjoined by the Court, the defendants will likely continue to engage in the acts and practices alleged in this Complaint, or in similar illegal acts and practices.
The CFTC explains that it brings this action to enjoin the defendants’ unlawful acts and practices, to compel their compliance with the Act and Regulations, and to enjoin them from engaging in any commodity-related activities. In addition, the Commission seeks civil monetary penalties, restitution, and remedial ancillary relief, including, but not limited to, trading and registration bans, disgorgement of benefits derived from the defendants’ illegal activities, fees and costs, pre-judgment and post-judgment interest.