Broker/Dealer and Account Executive Fraud, Mismanagement and Misrepresentation Litigation and Arbitration Attorney, Russell L. Forkey, Esq.
CFTC Revokes Registrations of Richard Allan Finger, Jr. and his Company, Black Diamond Futures, LLC Based on Criminal Action
The U.S. Commodity Futures Trading Commission (CFTC) recently announced that it filed a Notice of Intent to Revoke the Registrations (Notice) of Richard Allan Finger, Jr. (Finger), a resident of Washington State, and Black Diamond Futures, LLC (Black Diamond), a Washington State limited liability company. The CFTC simultaneously issued an Opinion and Order (Order) settling the action and revoking Black Diamond’s registration with the CFTC as a Commodity Trading Advisor (CTA) and Finger’s registration as its sole Associated Person (AP).
The Notice alleged that, pursuant to the Commodity Exchange Act (CEA), Finger was subject to a statutory disqualification of his registration based upon his plea of guilty to one count of wire fraud, in violation of 18 U.S.C. § 1343 in the criminal action, United States v. Finger, Crim. Case No. 11-mj-424 (W.D. Wash.). The Notice further alleged that Black Diamond was subject to a statutory disqualification pursuant to the CEA because Finger was the sole principal of Black Diamond and Finger’s registration is subject to revocation.
The Notice alleged that in the criminal action, Finger admitted to certain facts, including that:
- From late 2009 to August 2011, Finger was a registered securities representative in Washington State;
- In approximately February 2011, Finger started his own broker-dealer, Black Diamond Securities LLC;
- In order to induce his existing investors to transfer their accounts to his new company, Finger fraudulently inflated the values of their accounts in statements he made to them;
- Thereafter, Finger churned the securities accounts of at least 10 of his investors, despite telling them that he would use a conservative investment strategy. For example, with respect to one investor, Finger’s churning reduced the value of the investor’s account from approximately $1 million to less than $225,000 within two months; and
- In order to conceal his churning, Finger emailed false account statements to his investors.
The CFTC’s Order accepting the offer of settlement in the statutory disqualification proceeding finds that Finger and Black Diamond are subject to statutory disqualification from registration with the CFTC pursuant to Sections 8a(2)(D)(iii) and (iv) and 8a(2)(H) of the CEA, respectively, and revokes their registrations.