The Commodity Futures Trading Commission (CFTC) has secured a Court order that puts an end to its lawsuit against Harris Bruce Landgarten, operator of Tradeanedge Members Fund (TMF).
On August 7, 2024, Judge Joan M. Azrack of the New York Eastern District Court signed a final judgment against Landgarten.
The order imposes permanent injunction and penalties. He will have to pay restitution in the amount of $91,000. He must pay a civil monetary penalty in the amount of $91,000, plus post-judgment interest.
The lawsuit was filed in July 2018. Landgarten was charged with defrauding participants in a commodity pool that he operated, the Tradeanedge Members Fund (TMF). The CFTC Complaint also charged Landgarten with providing his pool participants false account statements and with commingling pool funds with non-pool funds.
In particular, the CFTC’s Complaint alleged that since at least July 2014 through at least March 2017 (the Relevant Period), Landgarten incurred what he characterized as expenses of TMF for which he reimbursed himself by withdrawals from TMF’s bank account.
According to the Complaint, at no point during the Relevant Period did Landgarten disclose such purported expenses or withdrawals to TMF’s pool participants, either before or after their decisions to invest.
Additionally, the Complaint alleged that Landgarten sent account statements to TMF participants which reflected that the value of each participant’s investment in TMF was affected only by trading gains and losses and Landgarten’s management and incentive fees, but did not indicate that he was incurring any expenses on behalf of TMF or that he was reimbursing himself for such claimed expenses.
Further, as alleged, when a participant of TMF sought to withdraw his investment, Landgarten failed to honor the request because TMF had less than the amount of the participant’s investment left in its accounts.
The Complaint also alleged that, partly due to Landgarten’s inadequate record keeping practices, on numerous occasions he withdrew more money from TMF than he had incurred in claimed expenses, thus commingling pool funds with non-pool funds.
