The Commodity Futures Trading Commission (CFTC) has initiated a civil enforcement action against Patrick Wonsey, a resident of Riverview, Florida.

The federal lawsuit alleges that Wonsey orchestrated a deceptive trading scheme involving retail foreign currency (forex) and binary options, leading to a misappropriation of funds from numerous investors.

Patrick Wonsey allegedly mirrored a classic Ponzi scheme

According to court documents, between January 2017 and September 2022, Wonsey actively solicited and accumulated over $3.4 million from at least 50 individuals.

The funds were said to be allocated towards trading ventures in retail forex, binary options, metals, and digital assets. However, in his solicitations, Wonsey made numerous misleading claims and omissions about his previous trading successes, potential profitability, payout timelines, and trading risks.

Contrary to his promises, Wonsey solely ventured into retail forex and binary options trading. Furthermore, rather than utilizing the pooled funds for their intended trading purpose, Wonsey allegedly diverted these monies for personal use and orchestrated payouts to other pool participants, mirroring a classic Ponzi scheme. Multiple participants, upon seeking their returns, were either dismissed, given false reasons for delays, or completely ignored by Wonsey.

Wonsey indiscriminately mixed the pool’s funds with his personal assets

The CFTC complaint also highlighted that Wonsey failed to register as a commodity pool operator. His operations also lacked the required structure for the pool, and he indiscriminately mixed the pool’s funds with his personal assets.

In light of these allegations, the CFTC has motioned for the recovery of the fraudulent gains, the imposition of civil penalties, restitution to the defrauded investors, and a permanent trading and registration ban against Wonsey. Additionally, the commission seeks to prevent him from committing further violations of the Commodity Exchange Act.

Amidst rising instances of trading frauds, the CFTC has rolled out several Fraud Advisories to educate and alert the public, such as the Foreign Currency (Forex) Trading Fraud Advisory and the Commodity Pool Fraud Advisory. These advisories aim to familiarize investors with potential red flags and provide avenues to report dubious activities.

The CFTC also emphasized the importance of verifying a company’s registration status before any financial commitment. A lack of registration should raise concerns. The National Futures Association’s BASIC system allows individuals to check a company’s registration.