Federal Court Imposes $17M Fine on Kentucky Resident for Defrauding Commodity Futures Clients

The Commodity Futures Trading Commission yesterday announced that the U.S. District Court for the Eastern District of Kentucky entered a consent order for permanent injunction, restitution, and disgorgement against William S. Evans III (d/b/a Turning Point Investments) of Harrodsburg, Kentucky, and Evans' wife, Frances Evans. The court imposed almost $17 million in relief for defendant's wrongdoing, including his misappropriation of client money intended for futures trading.

The order requires that Evans pay restitution of $16,934,773.40, and Evans and his wife to disgorge $10,040,418.44. The order also imposes permanent trading and registration bans. The judgment resolves a CFTC enforcement case filed on May 28, 2020.

Case Background

According to the order, since approximately September 2018, Evans solicited and accepted at least $10.6 million from participants with numerous misrepresentations, including that he would use their funds to trade commodity futures, when in fact Evans misappropriated the funds for his personal use and to pay participants in a Ponzi-like scheme. He also misrepresented his fee structure and the likelihood of profits and risks. The order also states that Evans acted in a capacity requiring him to register with the CFTC as a Commodity Pool Operator, but Evans was not registered, as required.

The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets.