The Commodity Futures Trading Commission announced that the U.S. District Court for the Southern District of New York granted the CFTC’s motion for summary judgment against James R. Velissaris, finding he ran a fraudulent scheme in violation of the Commodity Exchange Act. The order imposes a USD 2.2 million civil monetary penalty and permanently enjoins Velissaris from further CEA violations, trading in any CFTC-regulated markets, entering into any transaction involving commodity interests, and registering with the CFTC. The underlying case alleged that, from 2018 to 2021, Velissaris operated a fraudulent valuation scheme to inflate the value of swaps held by two commodity pools managed by Infinity Q Capital Management LLC, a CFTC-registered commodity pool operator. He was charged with falsely representing that the funds valued over-the-counter derivative positions using an independent third-party system without substantive input from Infinity Q, while in fact making manual adjustments to artificially increase reported values, inflating net asset values and enabling inflated fees and new investments. The complaint alleged customers paid more than USD 125 million in excess fees, with approximately USD 22 million used for Velissaris’s own benefit; the court cited the egregiousness and duration of the misconduct and referenced related criminal sanctions including a 15-year prison sentence, USD 125,969,962 in restitution, and USD 22 million in forfeiture. The summary judgment order resolves the CFTC enforcement action filed on Feb. 17, 2022.

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