Friday, February 27, 2015

Texas Hedge Fund/Commodity Pool Manager Sentenced to 8+ Years In Federal Prison

On February 26, 2015, Kevin G. White of The Woodlands, Texas, was sentenced to 8+ years of prison resulting from a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on July 9, 2013. A concurrent filing was made by the Securities and Exchange Commission (SEC).

The suit alleged that RFF GP, LLC, and KGW Capital Management, LLC, tricked investors into investing in Revelation Forex Fund, LP, a purported $7.4 million hedge fund/commodity pool scam in which he used $1.7 million for his own personal use.

White found investors through websites and presentations at trade shows. According to the order, "White fabricated Revelation’s performance and lied about his investment experience".  Aitan Goelman, the CFTC’s Director of Enforcement, cleary used this case to make a statement about CFTC's willingness to assign prison time to financial fraud cases. Goelman had this to say about the verdict in the announcement:
The sentence in this case should serve as a warning that those who willfully commit fraud in our markets face the very real possibility of a significant term of imprisonment. The CFTC will continue its vigilance in protecting commodities and derivatives investors from fraud and other forms of financial crime.
To read the full announcement click here.