A federal court has ordered Walter Dunning Larrick III and Cambridge Financial Advisors LLC to pay $3,255,875 in restitution and a separate $9,767,625 civil monetary penalty, plus post-judgment interest. The October 16 judgment was announced by the Commodity Futures Trading Commission November 3; neither date establishes that participants have been repaid.
Findings in a default judgment
The Northern District of Texas entered the judgment after the defendants failed to appear or answer the complaint. In its accompanying order, the court took the complaint's well-pleaded allegations as true and made findings supporting judgment by default. This was a civil case, not a criminal conviction.
The court found that at least 70 people deposited at least $3,644,817.52 into Cambridge bank accounts for purported futures and options trading. The order says the defendants did not use participant funds to trade futures or options. Instead, most money went to offshore accounts in Costa Rica, while other funds paid Larrick's personal expenses or made payments to other participants in a manner akin to a Ponzi scheme.
The court also found that the online account statements were false and purported to show trading that never occurred. Its findings describe requests to withdraw money that were delayed or not fulfilled.
Restitution and penalty are separate
The restitution and penalty obligations apply jointly and severally to both defendants: each obligation is shared, rather than imposed in the stated amount separately on each defendant. Post-judgment interest accrues on both obligations.
The final judgment explicitly makes each pool participant who suffered a loss an intended third-party beneficiary. It permits such participants to seek enforcement for unpaid restitution. It also preserves their ability to establish that a greater amount is owed and their rights under state or common law.
What the order does and does not prove
The judgment imposes permanent trading and registration restrictions and injunctions against specified violations. CFTC says it resolves all claims in the agency's 2023 complaint.
The judgment establishes legal payment obligations and enforcement rights. The documents read do not show how much has been collected under the judgment or distributed to participants. The November 3 announcement is later than the court's October 16 action, not a new judgment date.