The Commodity Futures Trading Commission (CTFC) has issued a statement regarding U. S. District Court for the Southern District of New York entering a consent order on for a permanent injunction, monetary sanctions, and disgorgement of ill-gotten proceeds against Jimmy Gale Watson of Dallas, Texas. Watson was part of an enforcement action that involved John McAfee, who died in 2021 while in a prison in Spain. The CFTC filed against Watson and McAfee in March 2021 alleging they engaged in a “manipulative and deceptive digital asset ‘pump-and-dump’ scheme.”
CFTC Acting Director of Enforcement Gretchen Lowe stated:
“The CFTC will continue actively to use its enforcement authority in the digital asset space to combat fraud and manipulation.”
The CFTC claimed that Watson assisted in the ploy by secretly accumulating positions in digital assets in anticipation of price spikes following the misleading social media endorsements that touted the assets. Once pumped, the assets were dumped at a higher price.
The SEC announced earlier this week that it had settled its case with Watson as well.
The order requires Watson to disgorge approximately $146,000 in ill-gotten gains from the scheme and also to pay an equal amount in a civil monetary penalty. The order also permanently prohibits Watson from engaging in further violations of the Commodity Exchange Act (CEA) and CFTC regulations as charged, and it imposes registration and trading bans.