The Commodity Futures Trading Commission (CFTC) today filed a civil enforcement action in the U.S. 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 the defendants operated a fraudulent scheme in which they solicited and accepted at least $2 million from pool participants to invest in a commodity pool.
The defendants misappropriated much of the funds, attempted to conceal their fraudulent scheme by issuing false account and trading statements to pool participants, and misappropriated funds by paying some pool participants using funds from other pool participants, in the manner of a Ponzi scheme.
As alleged in the complaint, from approximately January 2022 to November 2022, Rodgers fraudulently solicited customers by representing Three Bridges was a successful commodity pool and by making misrepresentations about his past trading history. According to the defendants’ records, they solicited and received at least $2 million from approximately 50 pool participants to trade futures contracts on their behalf.
Further, the complaint alleges the defendants also commingled pool funds with non-pool assets and directed pool participants to send money to Rodgers’ personal account. Bank account records show Rodgers transferred money, including pool funds, from Three Bridges’ bank account to his personal trading account, where he placed trades in his own name. Additionally, Rodgers failed to receive all pool participants’ funds 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 pool participants, including creating false account statements to convince pool participants that the fund remained solvent, and later, creating false trade confirmations to wrongfully explain Three Bridges’ loss of pool participants’ funds.
The complaint further alleges that, Three Bridges and Rodgers acted as a commodity pool operator (CPO) by soliciting, accepting, and receiving funds to trade in commodity futures, but 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 its continuing litigation against the defendants, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
