Key Takeaways
- • The CFTC ordered Sharief Deona McDowell to pay $4.75 million in combined restitution ($2.376 million) and civil monetary penalties ($2.376 million) for operating an unregistered commodity trading advisor scheme that defrauded at least 29 clients.
- • McDowell solicited over $2 million from clients between October 2018 and March 2022 through Presidential Investments LLC, claiming to trade commodity futures and options on their behalf while actually misappropriating funds for personal use without conducting any trades.
- • The settlement permanently bars McDowell from all CFTC-regulated activities and includes cease-and-desist orders preventing further violations of the Commodity Exchange Act and CFTC regulations.
- • McDowell made material misrepresentations to clients about fund usage and purported trading profits, concealing the fact that no actual trading occurred and all client capital was diverted to personal benefit.
Summary
The Commodity Futures Trading Commission has settled enforcement action against Sharief Deona McDowell, imposing penalties totaling $4.75 million and permanent industry bans for operating an unregistered commodity trading advisor scheme and committing fraud against retail investors. The settlement requires McDowell to pay $2,376,509.96 in restitution to defrauded clients and an equal amount in civil monetary penalties.
Between October 2018 and March 2022, McDowell solicited and accepted more than $2 million from at least 29 individuals and entities through her company, Presidential Investments LLC. She represented herself as a registered commodity trading advisor offering discretionary trading services in commodity futures and options contracts. In reality, McDowell conducted no trading whatsoever on behalf of clients and instead misappropriated all client funds for her direct personal benefit.
The enforcement action highlights McDowell's systematic pattern of material misrepresentations, including false claims about how client funds would be deployed and fabricated trading profits. The CFTC found that McDowell knowingly omitted critical facts about her actual use of client capital and the non-existent returns her clients supposedly earned. The scheme operated entirely outside regulatory oversight, as McDowell failed to register or seek exemption as a CTA despite operating as one.
Beyond financial penalties, the settlement imposes comprehensive restrictions on McDowell's future activities. She is permanently barred from engaging in any CFTC-regulated activities and must cease and desist from further violations of the Commodity Exchange Act and applicable CFTC regulations. The CFTC's action underscores ongoing regulatory focus on unregistered trading advisors and the protection of retail investors in commodity markets, particularly in the managed futures space where discretionary trading authority creates heightened fraud risks.
Between October 2018 and March 2022, McDowell solicited and accepted more than $2 million from at least 29 individuals and entities through her company, Presidential Investments LLC. She represented herself as a registered commodity trading advisor offering discretionary trading services in commodity futures and options contracts. In reality, McDowell conducted no trading whatsoever on behalf of clients and instead misappropriated all client funds for her direct personal benefit.
The enforcement action highlights McDowell's systematic pattern of material misrepresentations, including false claims about how client funds would be deployed and fabricated trading profits. The CFTC found that McDowell knowingly omitted critical facts about her actual use of client capital and the non-existent returns her clients supposedly earned. The scheme operated entirely outside regulatory oversight, as McDowell failed to register or seek exemption as a CTA despite operating as one.
Beyond financial penalties, the settlement imposes comprehensive restrictions on McDowell's future activities. She is permanently barred from engaging in any CFTC-regulated activities and must cease and desist from further violations of the Commodity Exchange Act and applicable CFTC regulations. The CFTC's action underscores ongoing regulatory focus on unregistered trading advisors and the protection of retail investors in commodity markets, particularly in the managed futures space where discretionary trading authority creates heightened fraud risks.
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