U.S. Commodity Futures Trading Commission v. Wilson, 19 F. Supp. 3d 352

CFTC alleges Wilson and JBW violated the CEA by operating an unregistered commodity pool, making fraudulent misrepresentations, and using interstate commerce to defraud investors.
JBW was a Massachusetts LLC; Wilson was its sole manager and controlled trading decisions.
Wilson and JBW accepted investor contributions beginning September 2007, including family members and acquaintances.
Wilson operated JBW’s accounts (bank and MF Global) and traded commodity futures, including using an algorithm (Humphrey Program).
During 2007–2008 the fund grew to over 25 participants with more than $2 million in contributions, incurring substantial trading losses and partial investor refunds.
Wilson circulated NAV updates and other communications that falsely overstated fund value, including a September 13, 2008 NAV that he knew was inaccurate; he admitted manipulating disclosures after losses.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the defendants violated the CPO registration requirement	Wilson and JBW operated unregistered as CPOs	Advances an advice-of-counsel defense and reliance on professionals	Yes, violation of 6m(l) established
Whether Wilson’s NAV misrepresentations violated the general anti-fraud provisions	Misrepresentations about NAV were material and made with scienter	No intent to deceive; statements were not knowingly false	Yes, material misrepresentations with scienter established under 6b(a)(2)(A)-(C)
Whether 6o(l)(B) fraud via interstate commerce was violated	Use of email to relay false NAV constitutes fraud under 6o(l)(B)	scienter not required for 6o(l)(B)?	Yes, 6o(l)(B) violated; no scienter requirement for this subsection (as applied)
Whether restitution should be awarded	Restitution appropriate to disgorge ill-gotten gains	Restitution not warranted; measure focused on plaintiffs’ losses	Restitution denied; civil penalties imposed; restitution not warranted by record

First Commodity Corp. of Boston v. CFTC, 676 F.2d 1 (1st Cir. 1982) (strict liability for some CEA registration and conduct-based liability; informs limits on mens rea)
CFTC v. British American Commodity Options, 560 F.2d 135 (2d Cir. 1977) (registration as central to statutory scheme; strict liability nature of registration)
SEC v. Blavin, 557 F. Supp. 1304 (E.D. Mich. 1983) (SEC registration treated as strict liability in analogous context)
S.E.C. v. Princeton Econ. Int’l Ltd., 73 F. Supp. 2d 420 (S.D.N.Y. 1999) (establishes standard for proving fraud and scienter in commodity cases)
First Commodity Corp. v. CFTC (recklessness standard referenced), 676 F.2d 1 (1st Cir. 1982) (recklessness as basis for liability where intent is not proven)
CFTC v. Driver, 877 F. Supp. 2d 968 (C.D. Cal. 2012) (parallels between 6b and 6o; scienter not required for 6o(l)(B))