The Commodity Futures Trading Commission (CFTC) has secured a final judgment against Long Leaf Trading Group, Inc., James A. Donelson, Jeremy S. Ruth, Timothy M. Evans, and Andrew D. Nelson, on all counts.
The relevant order was signed by the Honorable Thomas M. Durkin of the Illinois Northern District Court on March 29, 2023.
The Court’s judgments as to liability against these defendants were previously entered on the CFTC’s various summary judgment motions, motions for supplemental relief, and motions for default judgment.
- Long Leaf Trading must pay restitution in the amount of $5,767,145.
- James A. Donelson must pay restitution in the amount of $2,376,738. Donelson is jointly and severally liable with Long Leaf Trading for this amount.
- Timothy M. Evans shall pay restitution in the amount of $3,390,407. Evans is jointly and severally liable with Long Leaf Trading for this amount.
- Jeremy S. Ruth shall pay restitution in the amount of $301,541.39.
- Andrew D. Nelson shall pay restitution in the amount of $26,356.
Long Leaf Trading must pay disgorgement in the amount of $4,010,994, whereas James A. Donelson has to pay disgorgement in the amount of $1,235,413. Donelson is jointly and severally liable with Long Leaf Trading for this amount. Timothy Evans will have to pay disgorgement of $3.08 million.
Each Defendant must pay a civil monetary penalty (“CMP Obligation”) as follows:
- Defendant Long Leaf Trading shall pay a CMP in the amount of $1,387,790.50.
- Defendant James A. Donelson shall pay a CMP in the amount of $617,706.50.
- Defendant Timothy M. Evans shall pay a CMP in the amount of $9,251,934.
- Defendant Jeremy S. Ruth shall pay a CMP in the amount of $150,770.50.
- Defendant Andrew D. Nelson shall pay a CMP in the amount of $199,094.
The CFTC alleges that Long Leaf was a boiler room that skirted registration and regulatory requirements and cheated and defrauded substantially all of its clients over its approximately five-year existence. Long Leaf did not register as a CTA and it did not provide customers with the required disclosure document.
In addition to its registration and regulatory violations, Long Leaf defrauded its customers through a scheme that spanned the ownership of both Defendant Timothy Evans (2015–November 2017) and Donelson (December 2017–December 2019). The fraud generally took the form of misrepresentations about the company’s performance, the qualifications of its management, and omissions of track record information— all of which are items that courts have long held are material as a matter of law in this context.
Long Leaf’s misrepresentations and omissions were memorialized in pitch scripts and other solicitation materials that were used by Long Leaf’s broker staff as they sat each day cold-calling hundreds of potential customers.
