Thursday, 24 July 2014
Last updated 3 min ago
Mar 31 2010 | 2:33am ET
While a cadet at the U.S. Military Academy, Enrique Villalba was subject to a strict honor code. According to the Commodity Futures Trading Commission, he left that honor code at West Point.
The regulator has alleged that Villalba’s commodity futures hedge fund, Money Market Alternative, was nothing more than a Ponzi scheme. In a complaint filed this week, the CFTC accuses Villalba of defrauding investors of $37.5 million from at least 1996 through November.
Villalba misappropriated some at least $10 million of that money, according to the complaint, using more than $7 million to make Ponzi-style payments to investors and at least $3 million to finance his coffee business, buy real estate and on other expenses. Of the $23.2 million he did invest, he lost $17 million, according to the CFTC.
To hide those massive losses, Villalba allegedly told clients the fund was consistently making money, in at least one case using phony commission merchant statements to show off his profitable trades.
The CFTC is seeking restitution, disgorgement and penalties against Villalba and Ohio-based MMA.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…