Arizona Trader Pays $2.5 Million for Role in Commodity Pool Ponzi Scheme

CFTC Whistleblower Program

A commodity trading advisory company based out of Mesa, Arizona, as well as its proprietor, have been permanently banned from any future trading activity following a complaint by the U.S. Commodity Futures Trading Commission (CFTC), which unveiled an array of fraudulent practices that were regularly employed in attempts to execute the Ponzi-style scheme. Draven LLC and its owner, Derek Springfield, were found to have engaged in various dishonest tactics in order to solicit at least 86 individuals for an estimated $1.46 million – of which only a fraction was invested as promised.

Draven, which specialized in foreign currency exchange (also known as forex) and various other commodity futures trading, wove an intricate web of lies to receive and retain client funding. Firstly, the company posed as a commodity pool operator, or CPO, a title which would have allowed the company to gather funds from multiple customers and invest the compiled amount in the interest of gaining leverage and receiving a larger return. However, not only was Draven not registered under the CFTC to operate as such, but the company used only a small percentage of the funding for trading purposes; rather, the majority of the money went to the owner’s personal expenses, such as food, shopping, and mortgage payments.

As the company was clearly not profiting from their near-nonexistent trades, Draven would also pull from the pooled funds to offer returns to customers who requested withdrawals, thus creating the illusion that the supposed investments were profitable. To perpetuate this misrepresentation and further avoid detection, Draven repeatedly falsified documents which detailed impressive return rates. In actuality, the company incurred considerable losses in nearly every trade in which it participated, a number that was staggeringly lower than the figure reported to customers. In fact, CFTC’s complaint cites that Draven’s trading accounts suffered an approximated $195,880 in net losses, despite their continual payout of “returns” on client withdrawals.

Fraudulent commodity pool schemes are one of the most prevalent causes of complaints filed by the CFTC. Many fraud operations that have been uncovered thus far share similarities with the case against Draven, mainly involving the lengths to which companies go to conceal their wrongdoings. The CFTC acknowledges the integral role that whistleblowers play in the uncovering of commodities trading fraud, due to the typically covert nature of both the schemes and those who execute them. In this understanding, the commission conceived the CFTC Whistleblower Program, which aims to protect and reward those who bring forward information that results in the recovery of illicitly obtained funds.

Whistleblower Justice Network Can Help You

Whistleblower Justice Network partners with whistleblowers in an attempt to expose financial fraud schemes that directly violate the standards of the U.S. Commodity Futures Trading Commission. Utilizing the CFTC’s Whistleblower Program, we work together with whistleblowers to bring forth a powerful and compelling case whilst ensuring the anonymity and protection of our clients. Together, we aim to bring to justice those who employ deceitful tactics in the pursuit of personal gain.

If you have meaningful information about commodity futures trading that you believe is in violation of the CFTC, Whistleblower Justice Network can help. Working alongside world-class legal counsel, we will ensure you are protected to the fullest extent of the law and that you receive credit for the information you bring to the U.S. government. Partnering with whistleblowers is all we do. Visit us at www.whistleblowerjustice.net, or call us at 844-WJN-4ALL, to learn if we can help you.

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