Trader used firm ties to freeze $3.6 million, investors allege

Three investors say a man who presented himself as a former exchange trader pooled $3.6 million of their money - then locked it all away.

Their complaint, filed July 7 in federal court in the Northern District of Alabama, targets an Alabama-based trader and two investment firms he was affiliated with. It calls the operation a "coordinated fraudulent scheme" to "misappropriate" their money.

For advisors and compliance teams, the interesting thread is not the trading. It is the affiliation. According to the complaint, the man presented himself as a former Chicago Mercantile Exchange trader and a principal of the firms. The complaint describes him as an investment advisor representative and managing director associated with one firm, and the owner and chief executive of the other. The investors say he ran his pitches through the firms' email systems, copied senior leadership on key messages, and used the connection to lend what the filing calls "institutional legitimacy" to the program.

The program itself was leveraged trading in gold and currencies, handled through an offshore platform. According to the complaint, neither the man nor the two firms was registered with the Commodity Futures Trading Commission or the National Futures Association in any of the roles the law requires - among them introducing broker, commodity pool operator, and commodity trading advisor. The pooled vehicle, the filing adds, was not registered with the SEC or with state regulators either.

Then come the promises. The investors say they were told their accounts would be kept separate, that stop-loss limits would protect them, and that they could withdraw at any time. According to the complaint, those protections were dropped. Their money was allegedly combined, traded as a group, and then hit with what the complaint calls "catastrophic" losses.

The man's own words carry the case. On December 12, 2024, the complaint says, he wrote of "continual complete disregard of everything I have been trying to implement," adding that he had "forbidden trading in the accounts." Soon after, the filing says, he told one investor the money sat across four different vehicles, each with "different management and redemption procedures" - which the complaint treats as a way to fend off withdrawal requests.

The amounts vary. One investor says he put in $1 million, another about $1.143 million, and a third roughly $1.5 million. None, they say, has been allowed to withdraw anything. On May 13, 2026, the complaint says, an automated system turned down three of one investor's withdrawal requests inside thirteen minutes, without explanation.

The filing also flags the man's regulatory footprint, noting two Form D notices he signed with the SEC in 2025, reporting sales of $3,385,000 and later $4,420,000.

In all, the suit runs to 15 counts - federal commodities and securities fraud, state securities claims, and common-law fraud and breach of fiduciary duty - and asks for the money back, punitive damages, and disgorgement.

None of the allegations have been tested in court, and no judge has ruled.