CFTC secures Court order for penalties of over $13M against unregistered CPO
The Commodity Futures Trading Commission (CFTC) today announced that the Texas Western District Court entered a consent order on July 6, imposing monetary sanctions against David Seibert.
The order resolves a CFTC action filed on September 10, 2020, and follows a September 15, 2020 order in which the court found Seibert liable for solicitation fraud and the misappropriation of client funds. The court also permanently prohibited him from further violations of the Commodity Exchange Act, as charged, and imposed permanent registration and trading bans.
The order requires Seibert to pay $10,794,508 in restitution to victims of his scheme and to pay a $2,278,853 civil monetary penalty.
From March 2016 through April 2019, Seibert fraudulently solicited and accepted more than $10 million from 11 participants. At the time, Seibert claimed that he would use participant funds for short-term, high-interest, secured “bridge loans” made to third-party borrowers who purportedly would use the loaned funds to make property repairs as they sought permanent financing.
Seibert told participants that he would find the lending opportunities, complete the due diligence to confirm that the borrower was qualified, and handle the closing and servicing of the loan.
However, Seibert did not originate any loans. Seibert instead pooled and used most of the funds to trade commodity interests in his personal trading account, where he lost more than $8.3 million trading. He used other participant funds for personal expenditures.