CFTC Wins $13M Default Judgment in Commodities Fraud Case Against Larrick and Cambridge Financial Advisors

The CFTC commodities fraud case ended with a default judgment entered by the U.S. District Court for the Northern District of Texas against Walter Dunning Larrick III and Cambridge Financial Advisors LLC, ordering more than $13 million in combined penalties and restitution.

According to the CFTC, the court found that the defendants fraudulently solicited and misappropriated more than $3 million from participants. The court found they falsely represented that participant funds would be used to trade futures and options, including those involving natural gas, oil and gold, and made material misrepresentations and omissions about the profitability of commodity trading with them. The court also found the defendants issued false account statements to conceal their misconduct.

The court further found that the defendants misappropriated participant funds by making payments to existing participants in a manner akin to a Ponzi scheme, paying Larrick's personal expenses and sending funds to offshore accounts in Costa Rica.

The default judgment requires the defendants to pay a $9,767,625 civil monetary penalty and $3,255,875 in restitution. The court also permanently enjoined them from further violations of the Commodity Exchange Act and Commission regulations as charged, and imposed permanent trading and registration bans.

The default judgment resolves all claims in the CFTC's 2023 complaint.