Defendant Agrees to Liability, Federal Judge Issues Permanent Injunction and Orders Registration, Trading Bans.
The Commodity Futures Trading Commission (CFTC) has announced the filing of a civil enforcement action in the United States District Court for the Western District of Texas charging David Seibert, a Lakeway, Texas resident, with fraudulently soliciting and misappropriating more than $8.3 million of participant funds that he lost in undisclosed trading of commodity interests.
Seibert has agreed to the entry of a finding of liability by the court that he violated the Commodity Exchange Act by misappropriating commodity pool participant funds and by making misrepresentations to participants about the use of their funds. The Honorable Judge Robert Pitman of the U.S. District Court for the Western District of Texas on September 15, 2020 entered an order issuing a permanent injunction enjoining Seibert from future violations of the Commodity Exchange Act, and imposing permanent registration and trading bans, while reserving the assessment of monetary damages for a future determination by the court.
In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of ill-gotten gains, and a civil monetary penalty.
The order finds that from March 2016 to April 2019, Seibert operated under a number of fictitious names in connection with his misappropriation scheme: SEI-Equity Investments, a/k/a SEI Equity Investments, a/k/a Seibert Equity Investments, and d/b/a Great America Funding LLC a/k/a Great American Funding, LLC, a/k/a Great American Funding Lender Services. According to the order, Seibert solicited more than $10 million from at least eight members of the public to provide funds for short-term secured loans in return for the promise of high interest from third-party borrowers who purportedly would use their funds for real property improvements.
The order finds that Seibert did not originate any loans. Instead, he pooled and traded the funds in his commodity interest trading account without disclosing he was doing so. He thereafter lost $8,336,148 through these trades, and used other participants’ funds for various personal expenses, which he similarly did not disclose.
The Division of Enforcement staff members responsible for this action are Heather Dasso, Susan B. Padove, David A. Terrell, Scott R. Williamson, and Robert T. Howell.