Key Takeaways
- • The CFTC filed a civil enforcement action on October 4, 2016, against Jody Dupont of Anderson, South Carolina, and his company Open Range Trading LLC for fraudulently soliciting commodity futures day-trading system clients without CFTC registration.
- • Defendants allegedly collected approximately $92,000 from Open Range clients by charging subscription fees ranging from $250 per month for their purported trading system that provided buy and sell signals for commodity futures contracts.
- • The CFTC's complaint alleges material misrepresentations including: false claims that Dupont had 20+ years of trading experience, claims of large profits with minimal risk, false assertions of actual trading when none occurred, and failure to disclose that reported performance results were simulated or hypothetical rather than real trading results.
- • Marketing fraud occurred across multiple channels since at least March 2013, including the company website, YouTube, social media, written solicitation materials, newsletters, and verbal communications to prospective and existing clients.
- • Neither Dupont nor Open Range Trading LLC was registered with the CFTC, making their operation of a commodity trading advisor business and solicitation of clients a direct violation of CFTC regulations, specifically Regulation 4.41(a) governing false advertising.
Summary
The U.S. Commodity Futures Trading Commission brought a civil enforcement action against Jody Dupont and Open Range Trading LLC on October 4, 2016, alleging systematic fraud in the marketing and sale of an unregistered commodity futures day-trading system. Filed in the U.S. District Court for the District of South Carolina, the complaint centers on the defendants' unauthorized solicitation of clients to purchase the Open Range Trading System, which purportedly provided automated buy and sell signals for commodity futures trading.
According to the CFTC's allegations, the defendants engaged in a sustained scheme dating back to at least March 2013 and continuing through the present, collecting approximately $92,000 from clients through monthly subscription fees ranging from $250 upward. The defendants marketed their system through diverse channels—including a website, YouTube, social media platforms, written materials, newsletters, and direct verbal communications—despite neither party holding active CFTC registration as commodity trading advisors.
The core of the enforcement action rests on four categories of material misrepresentation. Defendants falsely claimed that Dupont possessed over twenty years of investment and trading experience. They misrepresented the system's performance characteristics, claiming it generated large profits with minimal risk exposure. Most significantly, the CFTC alleges that Dupont and Open Range marketed the trading system as if they were actively executing trades when, in fact, they were not conducting any actual trading activity. Additionally, the defendants failed to disclose that the performance results they advertised were based on simulated or hypothetical trading scenarios rather than documented actual trading results achieved by real clients.
The case represents a standard CFTC enforcement action against unregistered commodity trading advisors operating a fraudulent marketing scheme targeting retail clients. The combination of false performance claims, undisclosed hypothetical trading results, and unauthorized operation without CFTC registration constitutes violations of the antifraud provisions of the Commodity Exchange Act and CFTC Regulation 4.41(a).
According to the CFTC's allegations, the defendants engaged in a sustained scheme dating back to at least March 2013 and continuing through the present, collecting approximately $92,000 from clients through monthly subscription fees ranging from $250 upward. The defendants marketed their system through diverse channels—including a website, YouTube, social media platforms, written materials, newsletters, and direct verbal communications—despite neither party holding active CFTC registration as commodity trading advisors.
The core of the enforcement action rests on four categories of material misrepresentation. Defendants falsely claimed that Dupont possessed over twenty years of investment and trading experience. They misrepresented the system's performance characteristics, claiming it generated large profits with minimal risk exposure. Most significantly, the CFTC alleges that Dupont and Open Range marketed the trading system as if they were actively executing trades when, in fact, they were not conducting any actual trading activity. Additionally, the defendants failed to disclose that the performance results they advertised were based on simulated or hypothetical trading scenarios rather than documented actual trading results achieved by real clients.
The case represents a standard CFTC enforcement action against unregistered commodity trading advisors operating a fraudulent marketing scheme targeting retail clients. The combination of false performance claims, undisclosed hypothetical trading results, and unauthorized operation without CFTC registration constitutes violations of the antifraud provisions of the Commodity Exchange Act and CFTC Regulation 4.41(a).
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.