The Commodity Futures Trading Commission (CFTC) today filed an enforcement action in the US District Court for the Western District of Tennessee against Three Bridges Trading Fund, LLC, a Tennessee corporation, and its owner, president and manager, Donald Wray Rodgers of Collierville, Tennessee.
The complaint alleges that the defendants conducted a fraudulent scheme in which they solicited and accepted at least $2 million from consortium participants to invest in a pool of commodities.
Defendants embezzled many of the funds, attempted to conceal their fraudulent scheme by issuing false account and transaction statements to pool participants, and embezzled funds by paying some participants using other participants’ funds, in the manner of a Ponzi scheme.
According to the complaint, from about January 2022 to November 2022, Rodgers fraudulently solicited clients by representing Three Bridges was a successful commodity group and making false statements about past trading history. According to the defendants’ filings, they solicited and received at least $2 million from approximately 50 pool participants to trade futures contracts on their behalf.
Further, the complaint alleges that the defendants also co-mingled funds with non-team assets and asked participants to send money to Rodgers’ personal account. Bank account records show that Rogers transferred money, including joint funds, from the Three Bridges bank account to his personal trading account, where he made transactions in his own name. In addition, Rodgers failed to receive all of the pool participants’ money in the name of Three Bridges and failed to operate Three Bridges as a legal entity separate from himself.
As alleged in the complaint, when trading profits failed to materialize, the defendants attempted to conceal their fraudulent scheme by issuing false account documents to participants, including creating false account statements to convince participants that the fund remained solvent and later, creating false trade confirmations to falsely explain the loss of pool participants’ funds by Three Bridges;
The complaint also alleges that Three Bridges and Rodgers acted as a commodity pool operator (CPO) by soliciting, accepting and receiving funds to trade in commodity futures contracts, but that Three Bridges failed to register with the CFTC as a CPO as required. Additionally, Rodgers, as an agent of Three Bridges, acted as an Associated Person (AP) of the CPO, but failed to register with the CFTC as an AP as required.
In the ongoing action against the defendants, the CFTC seeks disgorgement, civil monetary penalties, restitution, trading and registration bans, and a permanent injunction for further violations of the Commodity Exchange Act (CEA) and CFTC regulations as alleged.