Commodity Futures Trading Commission v. McDonnell

287 F. Supp. 3d 213 (2018)

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Commodity Futures Trading Commission v. McDonnell

United States District Court for the Eastern District of New York
287 F. Supp. 3d 213 (2018)

Facts

Patrick McDonnell owned CabbageTech Corporation, which did business as Coin Drop Markets (collectively, McDonnell) (defendants). McDonnell advertised paid memberships in virtual-currency trading groups, which McDonnell claimed could generate weekly profits of up to 300 percent. However, McDonnell provided members with no or only minimal trading advice and eventually deleted his social media accounts and stopped communicating with members. McDonnell refused members’ demands for refunds of their membership fees. The Commodity Futures Trading Commission (CFTC) (plaintiff) sued McDonnell for fraud, alleging that McDonnell operated a deceptive and fraudulent virtual-currency scheme in contravention of the Commodity Exchange Act. Among other relief, the CFTC requested a preliminary injunction prohibiting McDonnell from further violations of the act.

Rule of Law

Issue

Holding and Reasoning (Weinstein, J.)

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