CFTC Files Enforcement Action Against Young Pros Investment Group and Operators Over $1M Futures Fraud

The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action in the U.S. District Court for the Eastern District of Michigan against Brian Mitchell of Michigan, Kevin Mack Jr. of Maryland, and their entity, Young Pros Investment Group LLC (YPIG). The complaint charges the defendants with fraudulent solicitation, registration violations, and operating an unregistered commodity pool that accepted approximately $1 million from around 33 participants. According to the CFTC, between December 2020 and May 2022, Mitchell and Mack acted as controlling persons of YPIG to solicit and pool customer funds for trading commodity futures. The regulator alleges the defendants misled investors with false claims regarding Mitchell's trading track record, fabricated profit guarantees, and promised protections against losses while failing to disclose the inherent risks of futures trading. The complaint states that YPIG incurred net trading losses across most months of operation. To conceal these losses, the defendants allegedly generated falsified account statements and utilized funds from new pool participants to make Ponzi-style payouts to earlier investors. Furthermore, the defendants failed to register YPIG as a commodity pool operator, failed to register themselves as associated persons, commingled pool capital with personal funds, and did not maintain the pool as a separate legal entity. The regulatory filing also notes that Mitchell violated a previous 2021 CFTC administrative order. That prior order arose from unregistered commodity trading advisor activities and barred Mitchell from trading on CFTC-registered platforms or engaging in activities requiring registration for three years. Despite the ban, Mitchell allegedly continued soliciting investor funds, directing trading activities, and acting as an associated person for YPIG. In its lawsuit, the CFTC is seeking full restitution for defrauded participants, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and permanent injunctions against further violations of the Commodity Exchange Act and CFTC regulations. The commission acknowledged assistance in the investigation from the Maryland Office of the Attorney General, the Maryland Securities Division, the FBI, and the U.S. Attorney’s Office for the Eastern District of Michigan.