A Pennsylvania federal court froze the assets of Philadelphia Alternative Asset Management Company, LLC (PAAM), a commodity pool operator, and Paul Eustance. The CFTC alleged that PAAM and Eustance, who managed PAAM, fraudelently solicited propsective pool participants. Specifically, PAAM and Eustace, according to the CFTC’s complaint:

  • issued false statements to at least one investor about the profitability of the investment pool;
  • told an investor that his account had increased $1 million when in fact the pool never traded furtues or options;
  • solicited another prospective investor by showing purportedly profitable trading results for the pool that were false because the pool never traded futures and options;
  • posted false trading results on the PAAM website for two other pools operated by the firm.

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