CFTC Wins Trading Bans and Penalties in Commodity Pool Fraud Case
The Commodity Futures Trading Commission said a federal court in the Southern District of Florida entered consent orders against Steven Likos and Archie Rice in a retail commodity-pool fraud case. The orders require more than $500,000 in disgorgement and civil monetary penalties and permanently bar both men from trading and from registering with the CFTC.
According to the CFTC, Likos acted as a sales agent for Algo Capital LLC and misappropriated customer funds while making false statements about withdrawals and the use of a proprietary trading algorithm. The agency said Algo Capital had arranged for Traders Domain FX Ltd. to trade customer funds, despite red flags that the funds were not being traded as represented.
The CFTC said Rice, while soliciting for Centurion Capital Group Inc., also misappropriated customer money and made false claims about the firm’s historical profits. The court ordered Likos to pay $320,041.38 in disgorgement and Rice to pay $227,220 in civil monetary penalties. The orders resolve the CFTC’s claims against those two defendants; its action against the remaining defendants continues.
Why it matters
For traders considering managed accounts, commodity pools, or algorithmic trading offers, the case highlights the need to verify who holds the funds, whether withdrawals are being honoured, and whether a claimed strategy can be independently substantiated. A marketing claim about an algorithm or past profits is not a substitute for regulated disclosures, account statements, and clear custody arrangements.
The CFTC also cautioned that a disgorgement order does not guarantee victims will recover losses, because defendants may lack sufficient assets. That makes due diligence before funding an account especially important.
What to watch next
The CFTC’s enforcement case against the remaining defendants is still ongoing. Traders can watch for further court filings and should use the regulator’s registration resources when assessing commodity-pool operators or associated persons.