Federal Prosecutors Charge Hedge Fund Manager For Ponzi Scheme

Posted on May 18th, 2023 at 1:11 PM
Federal Prosecutors Charge Hedge Fund Manager For Ponzi Scheme

From the desk of Jim Eccleston at Eccleston Law 

A former Chicago-based commodities trader, Phillip Galles, has been charged with a single count of wire fraud for allegedly misappropriating $2 million after informing clients that the funds would be invested in commodity futures. 

Prosecutors allege that Galles did not invest the funds in commodity futures and instead operated a Ponzi scheme, in which Galles used new investor money to pay off earlier investors as well as cover personal expenses. Additionally, the Commodity Futures Trading Commission (CFTC) has filed suit against Galles in federal court in Chicago. Galles allegedly informed potential clients that his firm, Tyche Asset Management, employed numerous former Goldman Sachs employees, and had “in the U.S. $275 million under management, and $1.7 billion offshore”, according to the CFTC.

Furthermore, Galles falsely informed investors that Tyche had multiple offices and more than 100 employees. In one instance, a Texas mortgage professional wired Galles $100,000 to invest, according to the CFTC. However, Galles instead transferred $19,300 to a personal credit card bill, $14,800 to a jewelry store, $10,000 to an earlier investor, $9,000 to a mattress store, $6,000 to a luxury car company, and $3,200 to his girlfriend, according to prosecutors.

 

Eccleston Law LLC represents financial advisors and investors nationwide in securities, employment, transition, regulatory and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

If you are being bothered by the Regulators, call Eccleston Law, you won't regret it.

Rick R.

LATEST NEWS AND ARTICLES

July 26, 2024
Kentucky Advisor Sues LPL Financial for Alleged Corporate Raid

A Kentucky advisor, Mark Lamkin, has filed a lawsuit against LPL Financial, claiming the independent broker-dealer orchestrated a corporate raid that resulted in the loss of his firm’s entire book of managed assets.

July 25, 2024
FINRA Plans Fee Increases Amid Rising Costs and Losses

The Financial Industry Regulatory Authority (FINRA) has announced plans to raise fees for its approximately 3,300 broker-dealer member firms. According to AdvisorHub, the self-regulator faces soaring costs, as detailed in its annual report published at the end of June.

July 24, 2024
Raymond James Settles with Oregon Over Excessive Commissions

Raymond James recently settled a case with Oregon's Division of Financial Regulation (“DFR”), agreeing to pay nearly $200,000 over allegations of charging excessive commissions to retail investors.