A civil enforcement action has been filed in the U.S. District Court for the District of Arizona against Cory Williams of Gilbert, Arizona, and his company, Williams Advisory Group (WAG), charging them with defrauding 40 investors out of at least $13 million in connection with a commodity pool they operated.
The Commodity Futures Trading Commission complaint charges Williams and WAG with commodity futures fraud and Williams with commodity pool fraud and failure to register as a commodity pool operator. The Complaint also charges Williams with engaging in activities prohibited for a commodity pool operator, including commingling pool participant funds with Williams’ personal funds. The Complaint alleges that Williams’ victims included family members, friends, neighbors and members of his church and other related churches in and around Phoenix, Arizona.
“As alleged, Cory Williams lied to his victims to convince them to invest millions of dollars in his fund. Williams promised to invest their money using his expertise, backed up by a track record of profitable investments. But in reality, Williams simply made up his profitable past, and he spent his victims’ money on himself—using some of it to fund his own dining, travel, and other personal expenses. To perpetrate this fraud, Williams preyed on those closest to him, including members of his family, community, and church,” said James McDonald, Director of CFTC’s Division of Enforcement.
According to the Complaint, from at least April 2014 through December 2016, Williams fraudulently solicited and accepted at least $13 million from 40 individuals to trade E-Mini S&P 500 futures contracts, among other things, in a pooled fund. As alleged, Williams lost all $13 million of participants’ funds either through trading futures contracts in his personal accounts or through misappropriating the funds.
In soliciting prospective and existing participants, Williams knowingly made misrepresentations regarding his trading abilities and profits, including that Williams was an experienced and profitable trader and that Williams’ trading was consistently profitable, according to the Complaint. In reality, however, Williams lost more than $8.3 million of the $13 million of participants’ funds trading significant volumes of E-Mini S&P futures contracts in his personal accounts. As alleged, the remaining funds received from participants were used by Williams to pay his personal expenses and to return approximately $3.4 million to certain participants as purported “profits” in the manner of a “Ponzi” scheme, according to the Complaint.
To conceal and perpetrate his fraud, according to the Complaint, Williams sent weekly text messages to pool participants reporting fabricated trading profits as high as $30,000 per week on their investments, even though participants accrued no profits and suffered total or near total losses of their deposits, as alleged in the Complaint.
In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws, as charged.