CFTC secures Court order against Tyche Asset Management and its principal
The Commodity Futures Trading Commission (CFTC) has secured a Court order against Chicago-based Tyche Asset Management, LLC, Phillip Galles, its principal and registered associated person, as well as eight other Tyche entities Galles controlled.
The order imposes a heavy monetary penalty on the defendants.
The Court has restrained the defendants from directly or indirectly cheating or defrauding, or attempting to cheat or defraud, persons. The defendants are also prohibited from engaging in conduct as a Commodity Pool Operator, or an Associated Person of a Commodity Pool Operator.
Further, the defendants are permanently restrained, enjoined and prohibited from directly or indirectly trading on or subject to the rules of any registered entity and entering into any transactions involving “commodity interests”.
The defendants must pay, jointly and severally, restitution in the amount of $5,327,173. They also have to pay, jointly and severally, a civil monetary penalty in the amount of $15,981,519.
The CFTC launched this action in the U.S. District Court for the Northern District of Illinois back in May 2023. The complaint charged Galles and the Tyche entities with defrauding more than 50 people throughout the U.S. in a Ponzi-like scheme that received more than $6 million between approximately October 2019 and the present.
The complaint charged Galles and the Tyche entities with a commodity pool fraud. The complaint also charged Galles and Tyche Asset Management LLC, with violating CFTC regulations governing the proper operation of commodity pools, and with making false and misleading statements to the National Futures Association (NFA), a registered futures association acting in furtherance of its official duties under the Commodity Exchange Act (CEA).
The case was closed on November 8, 2023.