CFTC $1mn Hedge Fund Ponzi

On Nov. 15, CFTC imposed $1mn settlement on hedge fund Ponzi.

  • Charges against Kevin Whylie, Matthew Zecchini, hedge fund, Algointeractive.

Alleged Violation

  • Defendants charged with fraudulent solicitation and misappropriation of funds.
  • Made false claims in solicitations, to current and prospective pool participants.
  • Misrepresented experience and that all or most of participants’ funds would be
    invested in, among other things, futures contracts, for the participants’ benefit.
  • Defendants made and issued false documents on monthly account statements.
  • Only fraction of funds solicited, were ever deposited in futures trading account.
  • $59.4k has been returned to participants including via early Ponzi repayments.
  • Orders find that the commodity pool was not operated as separate legal entity.


  • Whylie will pay a $100k civil monetary penalty, and the default order requires
    Zecchini and Algointeractive to pay, jointly and severally, a $721k civil penalty.
  • $240k restitution to participants and permanent trading and registration bans.