Federal regulators accuse commodity trading firm Ludiera Capital of fraud, Ponzi scheme

By Jonathan Bilyk | Jun 26, 2015

A company which purported to deal in commodities, but which allegedly operated a shell company and associated Ponzi scheme which defrauded investors of at least $9 million, has come under the sights of federal commodities exchange regulators.

On Tuesday, June 23, the U.S. Futures Trading Commission filed suit in federal court in Chicago against Ludiera Capital, of Chicago, and Nick Wurl, the man listed as Ludiera’s president.

The complaint alleges Wurl and Ludiera have since July 2014 “defrauded” nearly four dozen individual and institutional investors who collectively had contributed more than $9 million to a fund Wurl and Ludiera had established to ostensibly offer participants a safe way to trade in commodities and futures options, yet in actuality routinely raided to place personal investments and pay personal expenses, including tens of thousands of dollars in personal credit card debt and to buy cars, among other improper uses.

Wurl was also indicted in U.S. District Court in Chicago on Tuesday, June 23, on federal wire fraud charges in connection with the scheme alleged in the commission’s civil complaint.

According to the commission’s civil complaint, Wurl and Ludiera established its “Ludiera Diversified Opportunity Portfolio L.P.” pool fund, which they marketed to investors as “a safe and well-capitalized limited partnership … to supply operating capital to Ludiera for its purported physical commodity trading,” which supposedly included investments in “agricultural and energy products.

“Defendants characterized the investment opportunity as a ‘no risk’ strategy and assured pool participants that the worst potential outcome was no gain on their investment,” the complaint states. “This portrait of defendants is a sham.”

The complaint alleges Wurl and others associated with Ludiera diverted the invested money to their own bank and trading accounts, using “the bulk of the pool participants’ funds – over $6.8 million – to trade futures and options.” Ludiera allegedly lost more than $3.3 million of that money on the exchanges, and allegedly never informed the funds’ investors of the trades made, much less the resulting “massive losses.”

“Defendants concocted elaborate and false stories about physical commodity transactions in order to convince participants to invest in their scheme,” the complaint says.

The commission alleges Wurl transferred about $1.4 million to his own trading accounts – which he lost. Ludiera also transferred about $5.6 million to other Ludiera trading accounts, losing more than $2 million of that “by trading primarily futures and options.”

In addition to the losing trades, Wurl spent $500,000 of the pool funds on his company’s debts and other expenses, and another $100,000 on personal expenses, including about $68,000 of personal credit card debt.

The commission further alleges Wurl and Ludiera paid $1.8 million in “redemptions” to other pool participants through a Ponzi scheme, while distributing “false monthly account statements” to participants, which would “falsely represent growth in value of pool participants’ interests.”

The commission alleges six counts against Ludiera and Wurl, including fraud, options fraud, deceptive practices and violations of federal commodities and futures trading regulations.

The commission has asked the court to order Wurl and Ludiera to cease its business, pay full restitution to the investors they allegedly defrauded and pay civil penalties of at least $140,000 per violation of federal law and regulations or triple their gains.

The complaint was filed by US CFTF Senior Trial Attorney Diane M. Romaniuk.

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