NEW YORK - THE US Commodity Futures Trading Commission said on Friday it had obtained a court order freezing the assets of the Brookshire Raw Materials Management for allegedly misappropriating US$4.6 million (S$7.04 million) in a Ponzi scheme.
'(The asset freeze order), arises from a CFTC complaint filed the same day charging the defendants with misappropriating more than US$4.6 million of customer funds and destroying records, among other things,' the CFTC said in a release.
The freeze also prohibited the destruction of documents by the Barrington, Illinois, commodity pool operator, Brookshire Raw Materials Management, LLC, its principals John Marshall and Stephen Adams, as well as Brookshire Raw Materials Group Inc and Brookshire and Company Ltd, of Toronto, Ontario.
The asset freeze order was granted by the U.S. District Court for the Northern District of Illinois.
'Between September 2006 and December 2008, Marshall, Adams, and BRM accepted millions of dollars from customers for investment in a commodity pool known as the Trust and operated as a Ponzi scheme,' the CFTC said.
A Ponzi scheme is one in which early investors are paid off with the money of new clients. Officials from Brookshire could not immediately be located for comment.
The CFTC said the fund was supposed to invest investor cash in commodity futures and forward contracts designated to 'replicate the investment methodology of corresponding indices developed and managed by Brookshire Raw Materials Group, Inc'.
Instead, more than US$5 million was wired to bank accounts in Canada, the CFTC said.
In addition, the CFTC said Marshall and Adams closed their offices in December 2008 and destroyed company data while failing to acknowledge redemption requests. -- REUTERS