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JAMES H. HOLL, III, CA Bar No.177885 

jholl@cftc.gov 

Attorney for Plaintiff 

COMMODITY FUTURES 

TRADING COMMISSION 

Three Lafayette Center, 1155 21st Street, NW 

Washington, DC 20581 

Telephone (202) 418-5311 

KARIN N. ROTH, pro hac vice pending

kroth@cftc.gov 

R. STEPHEN PAINTER, Jr., pro hac vice pending

spainter@cftc.gov 

Attorneys for Plaintiff 

COMMODITY FUTURES 

TRADING COMMISSION 

140 Broadway, 19th Floor 

New York, NY 10005 

Telephone: (646) 746-9764 

THE UNITED STATES DISTRICT COURT 

FOR THE CENTRAL DISTRICT OF CALIFORNIA 

WESTERN DIVISION 

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

 v. 

MAIN & PROSPECT CAPITAL, LLC,

DANIEL ADAM HEWKO, and 

DANIEL HEWKO, 

Defendants. 

 

Civil Action No. 

COMPLAINT FOR 

INJUNCTIVE AND OTHER 

EQUITABLE RELIEF AND FOR 

CIVIL MONETARY 

PENALTIES UNDER 

THE COMMODITY 

EXCHANGE ACT AND 

COMMISSION REGULATIONS 

DEMAND FOR JURY TRIAL 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 1 of 47 Page ID #:1

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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Plaintiff, Commodity Futures Trading Commission (“CFTC” or 

“Commission”), by and through its attorneys, alleges as follows: 

I. JURISDICTION AND VENUE 

1. This Court possesses jurisdiction over this action pursuant to 

28 U.S.C. § 1331 (2012) (codifying federal question jurisdiction) and 28 U.S.C. 

§ 1345 (2012) (providing that U.S. district courts have original jurisdiction over 

civil actions commenced by the United States or by any agency expressly 

authorized to sue by Act of Congress). In addition, Section 6c(a) of the 

Commodity Exchange Act (the “Act”), 7 U.S.C. § 13a-1(a) (2012), provides that 

U.S. district courts have jurisdiction to hear actions by the Commission for 

injunctive relief or to enforce compliance with the Act or any rule, regulation, or 

order thereunder whenever it shall appear to the Commission that any person has 

engaged, is engaging, or is about to engage in any act or practice constituting a 

violation of any provision of the Act or any rule, regulation, or order thereunder. 

2. Venue properly lies with this Court pursuant to Section 6c(e) of the 

Act, 7 U.S.C.§ 13a-1(e) (2012), because Defendants conducted business in this 

District, and acts and practices in violation of the Act have occurred, are occurring, 

or are about to occur within this District. 

II. SUMMARY 

3. Since August 2014, Defendants Main & Prospect Capital, LLC 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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(“Main & Prospect Capital”), Daniel Adam Hewko (“Adam Hewko” or “Adam”), 

and Daniel Hewko (“Daniel Hewko” or “Daniel”) (collectively, “Defendants”) 

have operated a fraudulent pooled investment vehicle, generally referred to by 

Defendants as Main & Prospect Capital’s Global Opportunity Fund (“Fund”). 

4. Specifically, from at least August 2014 to the present (“Relevant 

Period”), Defendants have solicited at least 19 individuals to invest more than $2.3 

million in the Fund. 

5. Defendants have falsely told investors that the Fund would invest their 

funds using, among other investment strategies, a global macro strategy, and that 

the Fund would trade various financial instruments, including stocks, commodities, 

and foreign currency. 

6. Defendants have deposited more than $1.1 million of the Fund’s 

assets into a futures trading account and traded a limited amount of futures 

contracts, on or subject to the rules of a designated contract market, with investor 

funds. The trading has not been profitable and in fact has incurred losses. 

7. In addition, Defendants have misappropriated Fund assets for the 

benefit of themselves, their family, and entities owned or controlled by Adam 

Hewko. 

8. Furthermore, Adam Hewko has caused false account statements to be 

created, and Daniel Hewko has sent the false account statements (among other 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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false and misleading materials) to investors to make it appear that the Fund had 

been profitable from August 2014 through 2018, when in fact the Fund has either 

sustained trading losses or been depleted by Defendants. 

9. For example, Defendants claimed in account statements sent to Fund 

investors that investors had enjoyed returns of over 20% in 2015, over 15% in 

2016, and over 12% in 2017. Defendants further claimed in account statements for 

the second quarter of 2018 that investors had enjoyed returns over the life of the 

Fund ranging from over 38% to more than 76%. These purported returns were all 

false. Far from earning double-digit gains every year, the Fund has actually 

incurred trading losses, and Defendants have dissipated other of the funds for the 

benefit of themselves, their family, and other unrelated entities owned or controlled 

by Adam Hewko. 

10. The account statements also have claimed, falsely or misleadingly, 

that the Fund had a “strong asset allocation” and that the Fund employed a “global 

macro strategy.” 

11. Moreover, when investors have sought to redeem their investments, 

Daniel Hewko has sought to cover up Defendants’ wrongdoing by telling 

investors, falsely, that they have not been able to satisfy withdrawal requests 

because the Fund was in his words, in a “trade,” or because of the Commission’s 

investigation. Daniel Hewko also continued to tell investors, falsely, that their 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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investments have been profitable. 

12. Main & Prospect Capital also has violated commodity pool disclosure 

requirements, failed to operate its commodity pool as a separate legal entity—by 

receiving pool participant funds in a name other than that of the pool and 

commingling pool funds with non-pool property—and failed to register with the 

Commission as a commodity pool operator (“CPO”) as required. 

13. Because Adam Hewko and Daniel Hewko have solicited investor 

funds for participation in the Fund, they were required to register with the 

Commission as associated persons (“APs”) of Main & Prospect Capital, but failed 

to do so. 

14. By virtue of their false and misleading statements and omissions of 

material facts to investors and by misappropriating investor funds, Defendants 

have used or employed (or attempted to use or employ) a device, scheme, or 

artifice to defraud investors; made (or attempted to make) untrue or misleading 

statements of material fact or omitted to state a material fact necessary in order to 

make the statements made not untrue or misleading; and engaged (or attempted to 

engage) in transactions, practices, or courses of business that operated as a fraud or 

deceit on investors in violation of Sections 4o(1)(A)-(B) and 6(c)(1) of the Act, 

7 U.S.C. §§ 6o(1)(A)-(B), 9(1) (2012), and Commission Regulation (“Regulation”) 

180.1(a), 17 C.F.R. § 180.1(a) (2019). 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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15. Additionally, Main & Prospect Capital has failed to register as a CPO 

and comply with certain CPO requirements, in violation of Section 4m(1) of the 

Act, 7 U.S.C. § 6m(1) (2012), and Regulations 4.20(a)-(c), 4.21, and 4.22, 

17 C.F.R. §§ 4.20(a)-(c), 4.21, 4.22 (2019). 

16. Adam Hewko and Daniel Hewko have failed to register as APs of a

CPO in violation of Section 4k(2) of the Act, 7 U.S.C. § 6k(2) (2012), and 

Regulation 3.12, 17 C.F.R. § 3.12 (2019), and Main & Prospect Capital has 

permitted itself to be associated with unregistered APs, in violation of Section 

4k(2) of the Act, 7 U.S.C. § 6k(2) (2012). 

17. Adam Hewko has controlled Main & Prospect Capital throughout the 

Relevant Period and has not acted in good faith or has knowingly induced Main & 

Prospect Capital’s violations of the Act and Regulations. Therefore, Adam Hewko 

is also liable pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b) (2012), for 

Main & Prospect Capital’s violations of Sections 4k(2), 4m(1), 4o(1)(A)-(B), and 

6(c)(1) of the Act, 7 U.S.C. §§ 6k(2), 6m(1), 6o(1)(A)-(B), 9(1) (2012), and 

Regulations 4.20(a)-(c), 4.21, and 4.22, 17 C.F.R. §§ 4.20(a)-(c), 4.21, 4.22 (2019). 

18. Main & Prospect Capital’s employees and agents, including Adam 

Hewko and Daniel Hewko, have committed the acts and omissions alleged herein 

within the course and scope of their employment, agency, or office with Main & 

Prospect Capital. Therefore, Main & Prospect Capital is liable, pursuant to Section 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 6 of 47 Page ID #:6
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B) (2012), and Regulation 1.2, 17 C.F.R. 

§ 1.2 (2019), as principal for the violative acts and omissions of Main & Prospect 

Capital’s employees and agents, including Adam Hewko and Daniel Hewko. 

19. Unless restrained and enjoined by this Court, Defendants are likely to 

continue to engage in the acts and practices alleged in this Complaint, and in 

similar illegal acts and practices. 

20. Accordingly, pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 

(2012), the Commission brings this action to permanently enjoin Defendants from 

further violations of the Act and Regulations and to seek civil monetary penalties 

and ancillary relief, including but not limited to permanent trading and registration 

bans, restitution, and disgorgement. 

III. THE PARTIES 

21. Plaintiff Commodity Futures Trading Commission is an 

independent federal regulatory agency charged by Congress with the 

administration and enforcement of the Act, 7 U.S.C. §§ 1-26 (2012), and 

regulations promulgated thereunder, 17 C.F.R. pt. 1-190 (2019).

22. Defendant Main & Prospect Capital, LLC is a Wyoming limited 

liability corporation. According to the Wyoming Secretary of State website, Main 

& Prospect Capital’s principal office is located in Cheyenne, Wyoming, and its 

status is listed as “Inactive—Administratively Dissolved (Tax).” During the 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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Relevant Period, Main & Prospect Capital has operated the Global Opportunity 

Fund. Main & Prospect Capital has never been registered with the Commission in 

any capacity. 

23. Defendant Adam Hewko is the owner, operator, manager, and 

President of Main & Prospect Capital. Adam Hewko’s last known residence is in 

Irvine, California. Adam Hewko has never been registered with the Commission 

in any capacity. 

24. Defendant Daniel Hewko, Adam Hewko’s father, maintains Main & 

Prospect Capital’s books and records, is signer on Main & Prospect Capital’s bank 

account, and is Main & Prospect Capital’s primary contact with investors. Daniel 

Hewko’s last known address is in Fairfield, California. Daniel Hewko has never 

been registered with the Commission in any capacity. 

IV. FACTS 

A. Defendants Solicited and Accepted Investor Funds 

for Main & Prospect Capital’s Pooled Investment Scheme 

25. In or around August 2014, Defendants began seeking investments in a 

pooled investment vehicle operated by Main & Prospect Capital and marketed to 

prospective investors as the Global Opportunity Fund. 

26. From in or around August 2014 through at least December 2015, 

Defendants received more than $2.3 million from at least 19 investors for the 

purpose of investing in the Fund. These funds were pooled in Main & Prospect 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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Capital’s bank account, rather than being held in separate accounts. 

27. Most, if not all, of the individuals who have invested during the 

Relevant Period with Main & Prospect Capital had been tax preparation clients of 

Daniel Hewko or individuals whom Daniel knew. Daniel Hewko referred these 

individuals to Adam Hewko (both before and after Adam started Main & Prospect 

Capital). Adam Hewko and Daniel Hewko have solicited funds for participation in 

the Fund. For example: 

(a) On or around June 8, 2015, a prospective investor emailed 

Daniel Hewko stating that “I would like to set up a time to meet 

with you to sign the paperwork to invest $100k with Adam”; 

Daniel Hewko replied: “Let’s do Thursday at 5:30 P.M. I will 

have the paperwork ready for you to sign and time to go over 

any questions you may have. . . .” Daniel Hewko met with the 

prospective investor on Thursday, June 11, 2015 as planned 

regarding her investment in the Fund. 

(b) Adam Hewko has met with investors prior to their investing in 

the Fund and described the Fund to them, including, as alleged 

below, telling at least one investor that the Fund would trade on 

world events and telling other investors that the Fund would 

invest variously in the stock market, commodities, and foreign 

currency. 

(c) Daniel Hewko has accepted investment checks from investors 

and deposited their funds into Main & Prospect Capital’s bank 

account, including two checks totaling $52,000 from an 

investor that Daniel Hewko acknowledged in writing as having 

been received by Daniel in his capacity as agent for Main & 

Prospect Capital. 

 

28. Adam Hewko and Daniel Hewko have provided most individuals who 

invested during the Relevant Period a Private Placement Memoranda (“PPM”) 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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with respect to their participation in the Fund, which materials often included a 

copy of Main & Prospect Capital’s Limited Liability Corporation Operating 

Agreement (“MPC Operating Agreement”). 

29. The Fund PPM states that investor proceeds will be used to purchase 

“distressed real property assets on some of the world’s largest bank’s balance 

sheets as well as private, distressed sellers and a macro opportunity by purchasing 

a varying range of depressed assets.” 

30. The MPC Operating Agreement states that the business purpose of

Main & Prospect Capital is “to maintain an open-ended investment fund for real 

estate related investment opportunities and other global macro opportunities.” 

31. By stating in the PPM and MPC Operating Agreement that Main & 

Prospect Capital would be seeking investments in a “macro opportunity” or “global 

macro opportunities,” and by calling the Fund the “Global Opportunity Fund,” and 

later providing quarterly statements to investors stating that the Fund employed a 

“global macro strategy,” Defendants have sought to give the impression that the 

Fund would be employing (and that the Fund did employ) a global macro strategy, 

i.e. a fund strategy centered on profiting from macroeconomic developments 

worldwide. 

32. Defendants have told other Main & Prospect Capital investors that 

Fund assets were invested or could be invested in the stock market, commodities, 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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or foreign currency. 

33. Main & Prospect Capital has accepted or received investor funds

during the Relevant Period, at least in part, for the purpose of trading futures 

contracts. 

34. Daniel Hewko testified under penalty of perjury that he understood 

from Adam that investor funds were going to be deposited into a trading account 

for the purpose of trading commodities. 

35. In an email sent to Adam Hewko on or around December 30, 2015, 

Daniel Hewko noted that “[t]he fund will have gains and losses with prudent 

strategies. This is understood with the management of a fund and investments in 

the commodity complex.” (Emphasis added.) 

36. Moreover, from in or around September 2014 to in or around 

November 2014, Defendants transferred more than $1.1 million of investor funds 

into a futures trading account with a registered futures commission merchant, 

referred to herein as “FCM-1.” 

37. On or around September 2, 2014, Adam Hewko, in his capacity as 

Main & Prospect Capital’s Manager, confirmed his intention to trade futures 

contracts with Fund assets, stating in account opening documents with FCM-1 that 

the business of Main & Prospect Capital was “[i]nvesting all asset classes,” 

specifically noting that this included the futures market. 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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38. In addition, Adam Hewko stated in the account application with 

FCM-1 and accompanying documents, falsely, that he, Adam, was the sole source 

of Main & Prospect Capital’s funds and that Main & Prospect Capital “has not and 

will not solicit funds from any person or entity for the purpose of trading 

commodities” and that the company “is not . . . required to be registered with the 

CFTC, NFA, SEC or FINRA.” 

39. Upon information and belief, Adam Hewko made the false statements 

alleged above in paragraph 38 in order to avoid raising potential concern on the 

part of FCM-1 concerning the fact that Main & Prospect Capital was not registered 

with the Commission; Defendants never disclosed to investors and potential 

investors that Adam Hewko made false statements to FCM-1 concerning Main & 

Prospect Capital’s business. 

40. On or around December 1, 2014, the funds in the futures trading

account with FCM-1 were transferred to a second registered futures commission 

merchant, referred to herein as “FCM-2.” Investor funds held with FCM-2 

remained in that trading account until in or around the summer of 2016 (at which 

point, as alleged more fully below, Defendants withdrew the funds and 

misappropriated Fund assets for the benefit of themselves, their family, and 

unrelated companies). 

41. Funds in the futures trading accounts with FCM-1 and FCM-2 have

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

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been used to conduct a limited amount of trading of futures contracts including 

crude oil and E-mini S&P 500 futures contracts, both of which were traded on 

designated contract markets. 

B. Defendants Created and Distributed False and Misleading 

Account Statements and Other Materials to Investors 

42. Prior to January 2016, Defendants did not routinely provide account 

statements to Fund investors. 

43. In a January 2016 letter to investors, Adam Hewko stated that “I know 

many of you have felt like you have been in the dark and I’m sorry and to show 

that I am addressing the problem . . . [m]oving forward, we will issue quarterly 

statements.” 

44. From in or around January 2016 through in or around October 2018, 

Individual-1 used information provided to him by Adam Hewko or Daniel Hewko 

to prepare quarterly account statements. Daniel Hewko, in turn, emailed those 

statements to Fund investors. 

45. By sending these quarterly statements to investors, Defendants have 

engaged in a scheme to mislead Fund investors regarding the performance of the 

Fund, namely to convince or attempt to convince investors that the Fund has been 

profitable when in fact it has not. 

46. All of the purported investment returns contained in the quarterly 

statements provided to investors for fourth quarter 2015 through third quarter 2018 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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were false. Defendants knew—or else acted with reckless disregard of the fact—

that the Fund had not earned these purported returns. 

47. What little futures trading the Fund did, in September and October 

2014 and January 2015 resulted in losses. Moreover, Fund proceeds were never 

invested in any other manner during the Relevant Period that generated any returns 

at all for Fund investors, much less the substantial returns claimed by Defendants 

in the quarterly statements. 

Fourth Quarter 2015 Statements Contained False 

Information about Fund Performance 

48. On or around January 1, 2016, Adam Hewko emailed Individual-1 a

spreadsheet showing initial investment amounts for each Fund investor and 

purported returns for each investor ranging from 24% to 63%. 

49. As alleged more fully below, the Fund had not earned any investment 

return for investors at the time that Adam Hewko sent the January 1, 2016 email to 

Individual-1, much less returns ranging from 24% to 63%. 

50. Based on information provided to Individual-1 by Adam Hewko, 

Individual-1 created quarterly statements to be sent to investors; the statements 

contained purported performance information for the last quarter of 2015, for the 

calendar year 2015, and since the Fund’s inception. These statements are referred 

to herein as the “Q4 2015 Statements.” 

51. On or around January 7, 2016, Individual-1 emailed Adam Hewko Q4 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

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2015 Statements he had prepared for approximately 19 investors, for Adam’s 

review and approval (each of which contained false information concerning 

purported investment gains in the Fund). 

52. Daniel Hewko emailed the Q4 2015 Statements to Fund investors in 

or around January 2016. 

53. The Q4 2015 Statements touted investment gains for investors for 

calendar year 2015 well over 20% for those investors who had been invested in the 

Fund the longest, with purported returns “since inception” for many investors 

exceeding 20% and in at least one instance exceeding 30%. 

54. All of the claimed investment returns in the Q4 2015 Statements were 

false. 

55. The funds initially held in the futures trading account with FCM-1 

(and subsequently the futures trading account with FCM-2)—in all, more than $1.1 

million—had been used to trade a small amount of futures contracts in September 

and October 2014 and January 2015, and incurred losses. Nor had Fund assets 

been invested in any other manner that generated any investment return at all for 

the Fund, much less the substantial profits touted to investors in the Q4 2015 

Statements. 

56. Notwithstanding Defendants’ claims to Fund investors that the Fund 

had been profitable in 2015, Adam Hewko described a far different reality to 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

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Daniel Hewko and Individual-1 in a January 5, 2016 email, namely that the Fund 

had suffered losses in 2015. 

57. On or about January 5, 2016, Adam Hewko emailed Daniel Hewko 

and Individual-1, stating that the account statement from FCM-2 showed a trading 

loss and “[f]or all intensive [sic] purposes that P&L is our 2015 P&L . . . That 

number it represents our total loss on the year . . .” and “[s]o that leaves us with a 

loss. A total loss from trading of (2026 . . . I don’t have the specific 

number . . .)[.]” 

58. Adam Hewko offered a number of potential “solutions” for the 2015 

losses in his January 5, 2016 email, including “trad[ing] out of it,” “provid[ing] 

what would have been INDECA [i.e., Indeca LLC] cash flow . . . to [Main & 

Prospect Capital],” or “assign[ing] equity to [Main & Prospect Capital], to be paid 

out back to [Main & Prospect Capital] . . . Schedule would probably be 12-

18[ ]months.” Indeca LLC was a company owned and operated by Adam Hewko, 

formed in or around October 27, 2015. 

59. Adam Hewko suggested in his January 5, 2016 email alternatively

that Defendants could “assign 50% loss to all and hope it works out. I for sure, 

will be put thru the grinder legally.” 

60. On or about January 7, 2016, Adam Hewko sent an email to 

Individual-1 with a spreadsheet attached, listing Fund investors, noting total Fund 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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investments of over $2.3 million, purported investment gains of approximately 

$550,000, and a supposed total Fund value of over $2.8 million. The spreadsheet 

noted that the difference between the total Fund value (which included the 

supposed total investment gains of over $550,000) and the Fund’s “current cash 

balance” was more than $1.5 million. The spreadsheet, referring to this $1.5 

million figure, stated “[t]his is our deficit. This is the amount we will put on the 

balance sheet as [Private] Equity Holdings.” 

61. These supposed “Private Equity Holdings” were a complete fiction. 

As Defendants well knew, Main & Prospect Capital had not made any investments 

in private equity. 

62. Notwithstanding the reality that Main & Prospect Capital had in fact 

incurred trading losses and its assets dissipated as of December 31, 2015, Adam 

Hewko caused Q4 2015 Statements (with fictitious gains) to be prepared, and 

Daniel Hewko sent the Q4 2015 Statements (with fictitious gains) to investors. 

63. Defendants knew—or acted with reckless disregard of the fact—that 

the Fund had actually accrued a loss in 2015 (and that Fund assets had been 

dissipated), when they created and disseminated to investors the Q4 2015 

Statements that claimed the Fund had investment gains in 2015—including for 

some investors, double-digit gains. 

64. In a letter from Adam Hewko that accompanied the Q4 2015 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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Statements sent to investors, Adam Hewko made numerous false and misleading 

statements, further giving the false impression—or attempting to give the false 

impression—that the Fund had been successful in 2015. 

65. That letter—referring to the preceding year, 2015—stated that: 

Looking back, this year has been good to us. Why? Well we have 

come out on top! Many hedge funds and money managers are closing up shop. Bad returns and the unknown are causing big 

problems for many people. Are we lucky? No. We’ve played it smart and tactical. We have grown our money and we will 

continue to do so.

(Emphasis added). 

66. The letter also stated that: 

We have come to a position where income can be made available.

If you wish to receive income, we will have a detailed discussion 

regarding what’s possible. This is exciting I know extra income is always welcome. So please do not hesitate to ask! 

(Emphasis added). 

67. Adam Hewko knew that the statements described in paragraphs 65 

and 66 above, were false because Defendants had neither grown investors’ funds 

nor generated income for investors in 2015, or at the very least, he was reckless 

when he made the false statements contained in paragraphs 65 and 66 above. 

68. The fictitious investment gains contained in the Q4 2015 Statements 

were also reflected in the purported account balances of all subsequent quarterly 

statements. 

2016 Statements Contained False 

Information about Fund Performance 

69. Main & Prospect Capital quarterly statements for 2016 (referred to 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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herein as the “2016 Statements”) claimed, falsely, that the Fund had earned a total 

investment return of 15.83% for investors in 2016. 

70. As Defendants well knew, the Fund had not enjoyed investment gains 

at all in 2016, much less the double-digit percentage returns claimed by Defendants 

in the 2016 Statements. 

71. Moreover, as alleged above, the 2016 Statements contained fictitious 

account balances that were inflated by the false returns previously touted in the Q4 

2015 Statements. 

72. Far from earning a double-digit return in 2016 as claimed by 

Defendants, the more than $1.1 million in investor funds held with FCM-2 were 

not used to trade futures contracts at all in 2016 and earned no return whatsoever. 

Those funds were transferred back to Main & Prospect Capital’s bank account in 

or around the summer of 2016. 

2017 Statements Contained False 

Information about Fund Performance

73. Quarterly statements for 2017 (referred to herein as the “2017 

Statements”) claimed, falsely, that the Fund had earned a total investment return of 

12.53% for investors in 2017. 

74. Moreover, as alleged above, the 2017 Statements contained fictitious 

account balances inflated by the false returns previously touted in the Q4 2015 

Statements and 2016 Statements. 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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75. As Defendants well knew, the Fund had not enjoyed investment gains 

at all in 2017, much less the double-digit percentage returns claimed by 

Defendants. 

2018 Statements Contained False 

Information about Fund Performance

76. Quarterly statements in 2018 similarly claimed that the Fund had 

enjoyed substantial investment gains. For example, second quarter 2018 

statements claimed, falsely, that the Fund had earned an investment return ranging 

from 38.28% to 76.42% for investors over the life of their respective investments 

in the Fund. 

77. As Defendants well knew, the Fund had not enjoyed investment gains 

at all, much less the significant, double-digit returns over the life of their 

investments, as claimed by Defendants. 

C. Defendants Misappropriated Pool Funds for the Benefit 

of Themselves, Their Family, and Unrelated Companies 

78. During the Relevant Period, Defendants have not used investor funds 

in the manner stated to investors, but rather have misappropriated a majority of the 

more than $2.3 million that had been solicited and accepted from Fund investors. 

Defendants have misappropriated funds for the benefit of Defendants, their family, 

and unrelated companies owned and controlled by Adam Hewko. 

79. Defendants have misappropriated Fund assets in the following ways 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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(among others): (1) Daniel Hewko made payments to Adam and Individual-1 with 

Fund assets to which they were not entitled to under the terms of the PPM; (2) 

Adam Hewko authorized Daniel to pay Main & Prospect Capital’s business 

expenses with Fund assets; and (3) Adam Hewko requested that Daniel pay 

expenses for, purchase equipment for, make purported loans to, and provide 

working capital for, other unrelated entities owned or controlled by Adam Hewko 

with Fund assets. 

80. Defendants have misappropriated investor funds for various purposes 

during the Relevant Period, including more than $679,000 in payments to Adam 

Hewko and Individual-1 and more than $1.2 million in payments to or for the 

benefit of unrelated entities owned or controlled by Adam Hewko. 

81. None of the transactions engaged in for the benefit of Defendants and 

their unrelated companies to date has resulted in the transfer of any value or 

potential value to Main & Prospect Capital or its investors, i.e. in the form of any 

ownership or equity stake, debt interest, or otherwise. Because these transactions 

have conferred no value or potential value to Main & Prospect Capital or its 

investors, those funds simply have been misappropriated by Defendants. 

82. The Fund PPM permits the payment to Adam Hewko of a 

“Management Fee” of “between 2% and 3% upon investment” and a “Performance 

Fee,” to be calculated as a percentage of “net profit,” defined as Main & Prospect 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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Capital’s “monthly gross income less [Main & Prospect Capital’s] monthly 

operating expenses . . . .” 

83. Despite the fact that Main & Prospect Capital has never earned any 

“net profit” in connection with its investment of Fund proceeds, Defendants 

nevertheless have used investor funds to pay Adam Hewko more than $525,000 

during the Relevant Period. 

84. Defendants have not disclosed to Fund investors that their funds have 

been used to fund and pay the expenses of companies owned or operated by Adam 

Hewko. 

D. Daniel Hewko Lied to Investors When 

They Sought to Withdraw Their Funds 

85. From at least April 2017 through the present, Daniel Hewko 

repeatedly has told Fund investors, falsely, that Main & Prospect Capital cannot 

satisfy withdrawal requests because Fund assets are, in his words, “in a trade.” 

86. For example, he stated in: 

(a) an email on or around April 12, 2017 to investor T.B. that 

T.B.’s “funds with MPC will be paid once A [sic] trade is 

closed”; 

(b) an email on or around October 30, 2017 to investor P.P. that 

“[f]rom my understanding, if a trade is closed before it [sic] 

maturity date the whole trade losses [sic] money”; 

(c) an email on or around February 1, 2018 to investor P.P. that 

“[w]hen a trade is closed then the money comes in and is 

available”; 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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(d) an email on or around March 4, 2018 to investor T.B. that “the 

fund in [sic] not liquid when trades are not closed,” that “[t]he 

fund and the trader are both fine as well as the trades,” and that 

there was “[n]othing is unusual for this type of a fund”; 

(e) an email on or around July 12, 2018 to investor D.S. that he, 

Daniel, was “aware of trade [sic] that is in place that will start 

paying”; 

(f) an email on or around July 27, 2018 to investor R.J. that “I 

have heard about a trade that is starting to produce”; and 

(g) an email on or around January 5, 2019 to investor J.S. that 

“[Adam Hewko] is in a trade and if he closes the trade the [sic] 

everyone loses money and this is not what he want[s] to do.” 

87. As Daniel Hewko well knew (because he was the one who controlled 

Main & Prospect Capital’s bank account and kept Main & Prospect Capital’s 

books and records), when he made these statements to investors described above in 

paragraph 86, Fund assets were not actually “in a trade,” but rather had been 

dissipated or misappropriated for the benefit of Defendants, their family, and 

entities, owned, controlled, or operated by Adam Hewko. At a minimum, Daniel 

Hewko made these statements with reckless disregard as to whether the statements 

were true or not. 

88. Daniel Hewko has told Fund investors, falsely, that Fund assets are 

“in a trade” to lull Fund investors and to cover up: (a) Defendants’ lies to investors 

about the Fund’s purported investment gains, (b) the fact that the Fund has 

incurred trading losses, and (c) Defendants’ misappropriation of Fund assets for 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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the benefit of themselves, their family, and entities owned or controlled by 

Defendant Adam Hewko. 

89. Daniel Hewko also has lied to investors about the performance of 

their investment, and told at least one investor that the investor’s funds were not 

lost or gone, in response to investor requests to withdraw funds. 

90. For example, on or around March 5, 2018, Daniel Hewko emailed 

T.B., stating that “[i]n review of your account and the trades with MPC,” T.B.’s 

“account balance” had grown from $185,105 as of January 2015 to approximately 

$231,765 as of December 31, 2015, approximately $270,447 as of December 31, 

2016, and approximately $304,344 as of December 31, 2017, stating that “[t]he 

fund is in very good position to have strong exit and closure of the fund in 2019 

with its current trades,” and suggesting that T.B. could “[r]emain in the fund until 

the fund closes a trade to have the funds to pay you in whole and you would 

continue to share in potential futures gains/losses.” 

91. Daniel Hewko knew that his statements about T.B.’s historic account 

balances could not possibly be true, or at the very least, he made the statements to 

T.B. with reckless disregard of whether the statements were in fact true or not. 

92. In an email on or around October 31, 2018, Daniel Hewko 

(responding to investor J.R.’s concerns regarding the account statement for the 

third quarter of 2018) stated to J.R. that “[y]es, the 3rd Quarter had a loss but your 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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[sic] still up 37+%.” 

93. Daniel Hewko knew that this statement to J.R. (i.e., that J.R. was “still 

up 37+%”) was false or else Daniel Hewko made the statement with reckless 

disregard as to whether it was in fact true or false. 

94. On or around December 26, 2018, Daniel Hewko emailed a Fund 

investor, J.S.: 

[I]f [Defendant Adam Hewko] sells he will lose money and he does 

not want to do that and that’s why you haven’t received you Quarterly Distribution. I will have a meeting with him on Friday to try to get an exact time when money will be available to you. Your 

money is not lost or gone and I know you need your distributions for living. Give until the weekend to get back in touch with you for a 

more divinity [sic] answer as to when you can expect money to come 

your way. 

(Emphasis added). 

95. Daniel Hewko’s statement that J.S.’s “money is not lost or gone” was 

false and misleading because, as Daniel well knew (as the signer on Main & 

Prospect Capital’s bank account and keeper of Main & Prospect Capital’s books), 

by that time, Fund assets had been dissipated almost entirely. 

96. Indeed, Daniel Hewko stated under penalty of perjury that he does not 

believe there are sufficient Fund assets to pay investors all the investment returns 

that had been promised in quarterly statements to investors. Nevertheless, Daniel 

Hewko did not disclose that fact to investors, and in fact continued to mislead 

investors that their funds were “not lost or gone” or had enjoyed sizeable returns 

(including in the emails alleged above to T.B., J.R., and J.S. in March 2018, 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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October 2018, and December 2018, respectively). 

97. Far from being honest to investors, Defendants (including Daniel 

Hewko) either have refused to communicate with investors about their investments 

or continued to make false and misleading statements about why the Fund is not 

able to satisfy its obligations to investors. 

98. For example, on March 1, 2019, in response to an investor’s questions 

about the status of her investment (including a request for quarterly statements and 

request to withdraw funds), Daniel Hewko blamed the Commission’s investigation 

for his inability to respond and failed to disclose to her the truth about her 

investment, i.e., that her funds, as well as the funds of other investors, had been 

entirely dissipated. Daniel Hewko emailed the investor: “Adam is under 

investigation of the CFTC and I have not received anything to send to you and I’m 

not sure anything will be coming until the investigation is over.” 

E. Defendants Failed to Register with the CFTC 

99. Throughout the Relevant Period, Main & Prospect Capital has 

operated a pooled or collective investment vehicle, and in connection therewith has 

solicited, accepted, or received funds, either directly or indirectly, for the purpose 

of trading futures contracts. 

100. During the Relevant Period, Main & Prospect Capital has received 

more than $2.3 million in investor funds into its corporate bank account; investor 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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funds have been pooled and not segregated into individual accounts. 

101. During the Relevant Period, Defendants have transferred more than 

$1.1 million—all, or most of which, was investor funds—to FCM-1, and those 

funds were held in a futures trading account in the name of Main & Prospect 

Capital. 

102. Main & Prospect Capital used investor funds held with FCM-1, and 

later FCM-2, to trade futures contracts in September and October 2014 and January 

2015, including crude oil futures contracts and E-mini S&P futures contracts, both 

of which are traded on or subject to the rules of a designated contract market. 

103. Daniel Hewko and Adam Hewko, in their capacity as a partner, 

officer, employee, consultant, agent (or similar status performing similar 

functions), have solicited funds, securities, or property for participation in a 

commodity pool or supervised such solicitation. 

104. Main & Prospect Capital has never registered with the Commission as 

a CPO and never qualified for any registration exemption. 

105. Daniel and Adam Hewko have never registered with the Commission

as APs of a CPO and never qualified for any registration exemption. 

F. Adam Hewko Controlled Main & Prospect Capital 

106. Adam Hewko testified under penalty of perjury that he had decisionmaking authority for Main & Prospect Capital, that Main & Prospect Capital was 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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his company and that he ran the company. 

107. Adam Hewko has held himself out to investors as the Manager of 

Main & Prospect Capital and signed Main & Prospect Capital’s subscription 

agreements on behalf of Main & Prospect Capital. 

108. According to the Fund PPM, return of investor capital is at the

discretion of Adam Hewko. 

109. Adam Hewko, as Main & Prospect Capital’s sole Manager, opened a

futures trading account with FCM-1 in the name of Main & Prospect Capital, and 

Adam Hewko had sole authority to place trades in that account on behalf of Main 

& Prospect Capital. 

110. Adam Hewko, in connection with his opening of the Main & Prospect 

Capital trading account with FCM-1, represented himself to FCM-1 as the 

President and majority owner of Main & Prospect Capital. 

111. Adam Hewko testified under penalty of perjury that he had decisionmaking authority for the entities to which—and for whose benefit—Defendants 

transferred investor funds. 

V. VIOLATIONS OF THE COMMODITY EXCHANGE ACT 

AND COMMISSION REGULATIONS 

COUNT ONE: 

Fraud by Deceptive Device or Contrivance 

(Violations of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2012) 

and Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2019)) 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

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112. Paragraphs 1 through 111 are re-alleged and incorporated herein by 

reference. 

113. 7 U.S.C. § 9(1), makes it unlawful, in relevant part, for any person, 

directly or indirectly, to: 

use or employ, or attempt to use or employ, in connection with any 

swap, or a contract of sale of any commodity in interstate commerce, 

or for future delivery on or subject to the rules of any registered entity, 

any manipulative or deceptive device or contrivance, in contravention 

of such rules and regulations as the Commission shall promulgate by 

not later than 1 year after [July 21, 2010, the date of enactment of the 

Dodd-Frank Wall Street Reform and Consumer Protection Act] . . . . 

114. 17 C.F.R. § 180.1(a), provides, in relevant part: 

It shall be unlawful for any person, directly or indirectly, in connection with any swap, or contract of sale of any commodity in 

interstate commerce, or contract for future delivery on or subject to 

the rules of any registered entity, to intentionally or recklessly: 

(1) Use or employ, or attempt to use or employ, any manipulative 

device, scheme, or artifice to defraud; 

(2) Make, or attempt to make, any untrue or misleading statement of a 

material fact or to omit to state a material fact necessary in order to 

make the statements made not untrue or misleading; 

(3) Engage, or attempt to engage, in any act, practice, or course of 

business, which operates or would operate as a fraud or deceit upon 

any person . . . . 

115. During the Relevant Period, as described above, Defendants have

violated 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a), in that they have used or 

employed (or attempted to use or employ) a device, scheme, or artifice to defraud 

investors; made (or attempted to make) untrue or misleading statements of material 

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PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

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fact or omitted to state a material fact necessary in order to make the statements 

made not untrue or misleading; and engaged (or attempted to engage) in 

transactions, practices, or courses of business that operated as a fraud or deceit on 

investors by, among other things: 

(a) Defendants intentionally or recklessly have told investors, falsely, that 

their investments have performed profitably, including by creating 

and/or delivering to Fund investors quarterly statements containing 

false statements concerning investment gains, when in fact the Fund 

had not earned gains; 

(b) Defendants intentionally or recklessly have misappropriated Fund 

assets for the benefit of Defendants, for the benefit of their family, and 

for the benefit of entities owned or controlled by Adam Hewko, and 

have failed to disclose that misappropriation to Fund investors; 

(c) Defendants falsely have told investors (either orally or in Fund 

documents) that the Fund would (or did) pursue certain investment 

strategies, including a global macro investment strategy, the trading of 

financial products (including stocks, commodities, and foreign 

currency), and real estate, when in fact Main & Prospect Capital 

and/or the Fund have not traded any financial instruments except for a 

limited amount of futures contracts on or subject to the rules of a 

designated contract market and instead simply dissipated Fund assets; 

and 

(d) Defendant Daniel Hewko intentionally or recklessly has told Fund 

investors, falsely, that the Fund has not been able to satisfy investors’ 

withdrawal requests because the Fund was, in his words, “in a trade” 

that needed to be “closed,” or because of the Commission’s 

investigation, when in fact the real reason has been that Fund assets 

have been dissipated for the benefit of Defendants, their family, and 

entities owned or controlled by Adam Hewko. 

116. Each and every misrepresentation or omission by Defendants, 

including but not limited to those specifically alleged herein, has been made with 

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the knowledge that it was false or misleading, or else made with reckless disregard 

of the fact that it was false and misleading. 

117. Each instance of: (1) using or employing, or attempting to use or 

employ, a device, scheme, or artifice to defraud; (2) making, or attempting to 

make, untrue or misleading statements of material fact, or omitting to state material 

facts necessary to make the statements not untrue or misleading; or (3) engaging, 

or attempting to engage, in any act, practice, or course of business, which operated 

or would operate as a fraud or deceit upon any person, including but not limited to 

those specifically alleged herein, is alleged as a separate and distinct violation of 

7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a). 

118. The foregoing acts, omissions, and failures of Main & Prospect 

Capital’s employees and agents, including Adam Hewko and Daniel Hewko, have 

occurred within the scope of their employment, agency, or office with Main & 

Prospect Capital. Therefore, Main & Prospect Capital is liable, pursuant to Section 

2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B) (2012), and Regulation 1.2, 17 C.F.R. 

§ 1.2 (2019), as principal for the violative actions and omissions of Main & 

Prospect Capital’s employees and agents, including Adam Hewko and Daniel 

Hewko. 

119. Adam Hewko has controlled Main & Prospect Capital, directly or 

indirectly, and has not acted in good faith or has knowingly induced acts 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 31 of 47 Page ID #:31
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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constituting Main & Prospect Capital’s violations, and is therefore liable, pursuant 

to Section 13(b) of the Act, 7 U.S.C. § 13c(b) (2012), for Main & Prospect 

Capital’s violations of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a). 

COUNT TWO: 

Fraud and Deceit by a CPO and by APs of a CPO (Violations of Section 4o(1)(A) and (B) of the Act, 7 U.S.C. § 6o(1)(A) and (B) (2012)) 

120. Paragraphs 1 through 119 are re-alleged and incorporated herein by 

reference. 

121. Section 1a(11) of the Act, 7 U.S.C. § 1a(11) (2012), defines a CPO , 

in relevant part, as any person: 

engaged in a business that is of the nature of a commodity pool, 

investment trust, syndicate, or similar form of enterprise, and who, in 

connection therewith, solicits, accepts, or receives from others, funds, 

securities, or property, either directly or through capital contributions, 

the sale of stock or other forms of securities, or otherwise, for the 

purpose of trading in commodity interests, including any—(I) 

commodity for future delivery . . . . 

122. Regulation 1.3, 17 C.F.R. § 1.3 (2019), in relevant part, defines an AP 

of a CPO as any natural person associated with a CPO: 

as a partner, officer, employee, consultant, or agent (or any natural 

person occupying a similar status or performing similar functions), in 

any capacity which involves (i) the solicitation of funds, securities, or 

property for a participation in a commodity pool or (ii) the supervision 

of any person or persons so engaged . . . . 

123. 7 U.S.C. § 6o(1), in relevant part, provides that: 

It shall be unlawful for a . . . [CPO], or [AP] of a [CPO], by use of the 

mails or any means or instrumentality of interstate commerce, directly 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 32 of 47 Page ID #:32
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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or indirectly—(A) to employ any device, scheme, or artifice to 

defraud any client or participant or prospective client or participant; or 

(B) to engage in any transaction, practice, or course of business which 

operates as a fraud or deceit upon any client or participant or

prospective client or participant. 

124. As alleged herein, during the Relevant Period, Main & Prospect 

Capital has acted as a CPO by engaging in a business that is of the nature of a 

commodity pool, investment trust, syndicate, or similar form of enterprise, and in 

connection therewith, soliciting, accepting, or receiving from others, funds, 

securities, or property, either directly or through capital contributions, the sale of 

stock or other forms of securities, or otherwise, for the purpose of trading in 

commodity futures contracts. 

125. During the Relevant Period, Adam Hewko has been an officer and 

employee of Main & Prospect Capital and has solicited funds, securities, or 

property for participation in the commodity pool or supervised such solicitation. 

As such, he has been an AP of Main & Prospect Capital. 

126. During the Relevant Period, Daniel Hewko has held himself out as 

agent of Main & Prospect Capital and/or performed similar functions as an 

employee or agent of Main & Prospect Capital and has solicited funds, securities, 

or property for participation in the commodity pool or supervised such solicitation. 

As such, he has been an AP of Main & Prospect Capital. 

127. As described above, Main & Prospect Capital, while acting as a CPO, 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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and Daniel Hewko and Adam Hewko, while acting as APs of a CPO, by use of the 

mails or any means or instrumentality of interstate commerce (including but not 

limited to emails, internet, and wire transfers) have violated 7 U.S.C. § 6o(1)(A) 

and (B) by the following conduct: 

(a) Defendants intentionally or recklessly have told investors, falsely, that 

their investments had performed profitably including by creating 

and/or delivering to Fund investors quarterly statements containing 

false statements concerning investment gains, when in fact the Fund 

had not earned gains; 

(b) Defendants intentionally or recklessly have misappropriated Fund 

assets for the benefit of Defendants, for the benefit of their family, and 

for the benefit of entities owned or controlled by Adam Hewko, and 

failed to disclose that misappropriation to Fund investors; 

(c) Defendants falsely have told investors (either orally or in Fund 

documents) that the Fund would (and did) pursue certain investment 

strategies, including a global macro investment strategy, the trading of 

financial products (including stocks, commodities, and foreign 

currency), and real estate, when in fact Main & Prospect Capital 

and/or the Fund have not traded any financial instruments except for a 

limited amount of futures contracts on or subject to the rules of a 

designated contract market and instead simply dissipated Fund assets; 

and 

(d) Defendant Daniel Hewko intentionally or recklessly has told Fund 

investors, falsely, that the Fund has not been able to satisfy investors’ 

withdrawal requests because the Fund was, in his words, “in a trade” 

that needed to be “closed,” or because of the Commission’s 

investigation, when in fact the real reason has been that Fund assets 

have been dissipated for the benefit of Defendants, their family, and 

entities owned or controlled by Adam Hewko. 

128. Each and every misrepresentation or omission by Defendants, 

including but not limited to those specifically alleged herein, has been made with 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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the knowledge that it was false or misleading, or else made with reckless disregard 

of the fact that it was false and misleading. 

129. Each misrepresentation or omission; each employment of a device, 

scheme, or artifice to defraud a client or participant or prospective client or 

participant; and each instance of a transaction, practice, or course of business 

which has operated as a fraud or deceit upon any client or participant or 

prospective client or participant by Defendants, including but not limited to those 

specifically alleged herein, constitutes a separate and distinct violation of 7 U.S.C. 

§ 6o(1)(A) and (B). 

130. The foregoing acts, omissions, and failures of Main & Prospect 

Capital’s employees and agents, including Adam Hewko and Daniel Hewko, have 

occurred within the scope of their employment, agency, or office with Main & 

Prospect Capital. Therefore, Main & Prospect Capital is liable, pursuant to 

7 U.S.C. § 2(a)(1)(B) and 17 C.F.R. § 1.2, as principal for the violative actions and 

omissions of Main & Prospect Capital’s employees and agents, including Adam 

Hewko and Daniel Hewko. 

131. Adam Hewko has controlled Main & Prospect Capital, directly or 

indirectly, and has not acted in good faith or has knowingly induced acts 

constituting Main & Prospect Capital’s violations, and is therefore liable, pursuant 

to 7 U.S.C. § 13c(b), for Main & Prospect Capital’s violations of 7 U.S.C. 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 35 of 47 Page ID #:35
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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§ 6o(1)(A) and (B). 

COUNT THREE: 

Failure to Register as a CPO (Violation of Section 4m(1) of the Act, 7 U.S.C. § 6m(1) (2012)) 

132. Paragraphs 1 through 131 are re-alleged and incorporated herein by 

reference. 

133. 7 U.S.C. § 6m(1) provides that it shall be unlawful for any CPO, 

unless registered with the Commission, to make use of the mails or any means or 

instrumentality of interstate commerce in connection with its business as a CPO. 

134. During the Relevant Period, Main & Prospect Capital has used the 

mails and/or other means or instrumentality of interstate commerce in connection 

with its business as a CPO (including emails, text messages, internet, and wire 

transfers), but has not been registered with the Commission as a CPO. Moreover, 

it has not claimed any exemption from the registration requirement, nor was it 

eligible for such. 

135. By failing to register as a CPO, Main & Prospect Capital has violated 

7 U.S.C. § 6m(1). 

136. Adam Hewko has controlled Main & Prospect Capital, directly or 

indirectly, and has not acted in good faith or has knowingly induced acts 

constituting Main & Prospect Capital’s violations, and is therefore liable, pursuant 

to 7 U.S.C. § 13c(b), for Main & Prospect Capital’s violations of 7 U.S.C. § 6m(1). 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 36 of 47 Page ID #:36
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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COUNT FOUR: 

Failure to Register as an AP of a CPO and Associating with Unregistered APs (Violation of Section 4k(2) of the Act, 7 U.S.C. § 6k(2) (2012), and Regulation 3.12, 17 C.F.R. § 3.12 (2019)) 

137. Paragraphs 1 through 136 are re-alleged and incorporated herein by 

reference. 

138. 7 U.S.C. § 6k(2), in relevant part, provides that “[i]t shall be unlawful 

for any person to be associated with a [CPO] as a partner, officer, employee, 

consultant, or agent (or any person occupying a similar status or performing similar 

functions), in any capacity that involves . . . the solicitation of funds, securities, or 

property for a participation in a commodity pool or . . . the supervision of any 

person or persons so engaged, unless such person is registered with the 

Commission under this Act as an [AP] of such [CPO] . . . .” 

139. 17 C.F.R. § 3.12, in relevant part, similarly provides that “[i]t shall be 

unlawful for any person to be associated with a . . . [CPO] . . . as an [AP] unless 

that person shall have registered under the Act as an [AP] of that sponsoring . . . 

[CPO] . . . .” 

140. 7 U.S.C. § 6k(2) also makes it unlawful for any CPO to permit any 

person not registered with the Commission to become or remain associated with 

the CPO as an AP when the CPO knew or should have known that such person was 

not registered with the Commission or that such registration had expired, been 

suspended (and the period of suspension has not expired), or been revoked. 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 37 of 47 Page ID #:37
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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141. During the Relevant Period, Daniel Hewko and Adam Hewko have 

acted as APs of a CPO and have not been registered in any capacity with the 

Commission. 

142. By soliciting funds for participation in a commodity pool, but failing 

to register with the Commission as APs of a CPO, Daniel Hewko and Adam 

Hewko have violated 7 U.S.C. § 6k(2) and 17 C.F.R. § 3.12. 

143. By permitting Daniel Hewko and Adam Hewko to be associated with

it as unregistered APs, when it knew or should have known that they were not 

registered, Main & Prospect Capital violated 7 U.S.C. § 6k(2). 

COUNT FIVE: 

Failure to Operate Pool as Separate Entity; Failure to Receive Pool Participant Funds in Pool’s Name; Commingling Pool Funds 

(Violations of Regulation 4.20(a)-(c), 17 C.F.R. § 4.20(a)-(c) (2019)) 

144. Paragraphs 1 through 143 are re-alleged and incorporated herein by 

reference. 

145. 17 C.F.R. § 4.20(a), requires a CPO, whether registered or not, to 

operate its commodity pool as an entity cognizable as a legal entity separate from 

the CPO. 

146. 17 C.F.R. § 4.20(b) prohibits CPOs, whether registered or not, from 

receiving pool participants’ funds in any name other than that of the pool. 

147. 17 C.F.R. § 4.20(c) prohibits a CPO, whether registered or not, from 

commingling the property of any pool it operates with the property of any other 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 38 of 47 Page ID #:38
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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person. 

148. During the Relevant Period, Main & Prospect Capital, while acting as 

a CPO, has violated 17 C.F.R. § 4.20(a)-(c) by: (1) failing to operate its 

commodity pool as legal entity separate from Main & Prospect Capital; (2) failing 

to receive pool participants’ funds in the name of a pool that was a legal entity 

separate from itself; and (3) commingling the property of the pool with property of 

Main & Prospect Capital or others. 

149. Adam Hewko has controlled Main & Prospect Capital, directly or 

indirectly, and has not acted in good faith or has knowingly induced acts 

constituting Main & Prospect Capital’s violations, and is therefore liable, pursuant 

to 7 U.S.C. § 13c(b), for Main & Prospect Capital’s violations of 17 C.F.R. 

§ 4.20(a)-(c). 

COUNT SIX: 

Failure to Provide Required Disclosures (Violation of Regulation 4.21, 17 C.F.R. § 4.21 (2019)) 

150. Paragraphs 1 through 149 are re-alleged and incorporated herein by 

reference. 

151. 17 C.F.R. § 4.21, in relevant part, provides that: 

each [CPO] registered or required to be registered under the Act must 

deliver or cause to be delivered to a prospective participant in a pool 

that it operates or intends to operate a Disclosure Document for the 

pool prepared in accordance with [Regulations 4.24 and 4.25] by no 

later than the time it delivers to the prospective participant a 

subscription agreement for the pool . . . . 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 39 of 47 Page ID #:39
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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152. Main & Prospect Capital has violated 17 C.F.R. § 4.21 by either

failing to provide a Fund disclosure document to some investors or by providing a 

Fund disclosure that did not contain certain information required by Regulations 

4.24 and 4.25, 17 C.F.R. §§ 4.24, 4.25 (2019), including the risks associated with 

trading futures contracts; the business backgrounds of the CPO, its trading 

manager, and principals; the types of commodity interests and other interests that 

the pool will trade; and actual or potential conflicts of interest. 

153. Adam Hewko has controlled Main & Prospect Capital, directly or 

indirectly, and has not acted in good faith or knowingly induced acts constituting 

Main & Prospect Capital’s violations, and is therefore liable, pursuant to 7 U.S.C. 

§ 13c(b), for Main & Prospect Capital’s violations of 17 C.F.R. § 4.21. 

COUNT SEVEN: 

Failure to Provide Monthly Statements (Violation of Regulation 4.22, 17 C.F.R. § 4.22 (2019)) 

154. Paragraphs 1 through 153 are re-alleged and incorporated herein by 

reference. 

155. 17 C.F.R. § 4.22 requires, in relevant part, that CPOs (registered or 

required to be registered) provide periodic account statements to investors—

presented and computed in accordance with generally accepted accounting 

principles—itemizing, among other things, the total amount of realized net gain or 

loss on commodity interest positions liquidated during the reporting period; the 

total amount of unrealized net gain or loss on commodity interest positions during 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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the reporting period, and the total amount of net gain or loss from all other 

transactions in which the pool engaged during the reporting period. 

156. Because Main & Prospect Capital has maintained net assets of more 

than $500,000 during the Relevant Period, it has been required, pursuant to 

17 C.F.R. § 4.22(b), to distribute account statements at least monthly. 

157. 17 C.F.R. § 4.22(a)(3) also requires that the monthly account 

statement disclose any material business dealings between the pool, the pool’s 

operator, or the principals thereof that were not disclosed in the initial disclosure 

document. 

158. 17 C.F.R. § 4.22(c) also requires that CPOs (registered or required to 

be registered) provide annual reports to investors. 

159. Main & Prospect Capital has violated Commission 17 C.F.R. § 

4.22(a)-(c) in that it failed to provide any account statements at all to investors 

from in or around August 2014 through January 2016. 

160. Main & Prospect Capital also has violated 17 C.F.R. § 4.22(b) in that 

it has provided quarterly statements to investors after January 2016, but failed to 

provide statements on a monthly basis as required. 

161. Main & Prospect Capital also has violated 17 C.F.R. § 4.22(a)(3) by 

failing to disclose in statements sent to investors that funds had been used in 

material business dealings involving Adam Hewko, a principal of the CPO, namely 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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that certain investor funds had been used for the benefit of other unrelated entities 

owned or controlled by Adam Hewko. 

162. Main & Prospect Capital also has violated 17 C.F.R. § 4.22 failing to 

provide investors with annual reports. 

163. Adam Hewko has controlled Main & Prospect Capital, directly or 

indirectly, and has not acted in good faith or has knowingly induced acts 

constituting Main & Prospect Capital’s violations, and is therefore liable, pursuant 

to 7 U.S.C. § 13c(b), for Main & Prospect Capital’s violations of 17 C.F.R. § 4.22. 

VI. RELIEF REQUESTED 

WHEREFORE, the Commission respectfully requests that this Court, as 

authorized by Section 6c of the Act, 7 U.S.C. § 13a-1 (2012), and pursuant to its 

own equitable powers: 

A. Find that Defendants have violated Sections 4o(1)(A)-(B), 4k(2) and 

6(c)(1) of the Act, 7 U.S.C. §§ 6o(1)(A)-(B), 6k(2), 9(1) (2012), and Regulation 

180.1(a), 17 C.F.R. § 180.1(a) (2019). 

B. Find that Main & Prospect Capital and Adam Hewko also have 

violated Sections 4m(1) of the Act, 7 U.S.C. § 6m(1) (2012), and Regulations 

4.20(a)-(c), 4.21, and 4.22, 17 C.F.R. §§ 4.20(a)-(c), 4.21, 4.22 (2019). 

C. Find that Adam Hewko and Daniel Hewko also have violated 

Regulation 3.12, 17 C.F.R. § 3.12 (2019). 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 42 of 47 Page ID #:42
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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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D. Enter an order of permanent injunction enjoining Defendants, and 

their affiliates, agents, servants, employees, successors, assigns, attorneys, and all 

persons in active concert with them, who receive actual notice of such order by 

personal service or otherwise, from directly or indirectly violating 7 U.S.C. 

§§ 6o(1)(A)-(B), 6k(2), 9(1), and 17 C.F.R. § 180.1(a); Defendants Main & 

Prospect Capital and Adam Hewko from also directly or indirectly violating 

7 U.S.C. § 6m(1) and 17 C.F.R. §§ 4.20(a)-(c), 4.21, and 4.22; and Defendants 

Adam Hewko and Daniel Hewko from also directly or indirectly violating 

17 C.F.R. § 3.12. 

E. Enter an order of permanent injunction restraining and enjoining 

Defendants, and their affiliates, agents, servants, employees, successors, assigns, 

attorneys, and all persons in active concert with them, from directly or indirectly:

(1) Trading on or subject to the rules of any registered entity (as that term 

is defined by Section 1a(40) of the Act, 7 U.S.C. § 1a(40) (2012));

(2) Entering into any transactions involving “commodity interests” (as 

that term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2019)), for 

accounts held in the name of any Defendant or for accounts in which 

any Defendant has a direct or indirect interest; 

(3) Having any commodity interests traded on any Defendant’s behalf;

(4) Controlling or directing the trading for or on behalf of any other 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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person or entity, whether by power of attorney or otherwise, in any 

account involving commodity interests;

(5) Soliciting, receiving, or accepting any funds from any person for the 

purpose of purchasing or selling of any commodity interests;

(6) Applying for registration or claiming exemption from registration 

with the CFTC in any capacity, and engaging in any activity requiring 

such registration or exemption from registration with the CFTC 

except as provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) 

(2019); and

(7) Acting as a principal (as that term is defined in Regulation 3.1(a), 

17 C.F.R. § 3.1(a) (2019)), agent, or any other officer or employee of 

any person registered, exempted from registration, or required to be 

registered with the CFTC except as provided for in 

17 C.F.R. § 4.14(a)(9).

F. Enter an order directing Defendants, as well as any third-party

transferee and/or successors thereof, to disgorge, pursuant to such procedure as the 

Court may order, all benefits received including, but not limited to, salaries, 

commissions, loans, fees, revenues, and trading profits derived, directly or 

indirectly, from acts or practices which constitute violations of the Act and 

Regulations as described herein, including pre-judgment and post-judgment 

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COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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interest;

G. Enter an order requiring Defendants, as well as any successors 

thereof, to make full restitution to every person who has sustained losses 

proximately caused by the violations described herein, including pre-judgment and 

post-judgment interest;

H. Enter an order directing Defendants and any of their successors, to 

rescind, pursuant to such procedures as the Court may order, all contracts and 

agreements, whether implied or express, entered into between them and any of the 

customers whose funds were received by them as a result of the acts and practices 

which constituted violations of the Act, as amended, as described herein; 

I. Enter an order directing Defendants to pay a civil monetary penalty 

assessed by the Court, in an amount not to exceed the penalty prescribed by 

Section 6c(d)(1) of the Act, 7 U.S.C. § 13a-1(d)(1) (2012), as adjusted for inflation 

pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act 

of 2015, Pub. L. 114-74, tit. VII, § 701, 129 Stat. 584, 599–600, see Regulation 

143.8, 17 C.F.R. § 143.8 (2019), for each violation of the Act and Regulations, as 

described herein; 

J. Enter an order requiring Defendants to pay costs and fees as permitted 

by 28 U.S.C. §§ 1920 and 2413(a)(2) (2012); and

K. Enter an order providing such other and further relief as this Court 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 45 of 47 Page ID #:45
- 46 - 

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL 

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may deem necessary and appropriate under the circumstances. 

 

Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 46 of 47 Page ID #:46
Case 2:19-cv-09736 Document 1 Filed 11/13/19 Page 47 of 47 Page ID #:47

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VII. DEMAND FOR JURY TRIAL 

The Commission hereby requests a jury trial on all issues raised in this 

complaint. 

Date: /£/Jw Zl;I! Respectfully submitted, 

U.S. COMMODITY FUTURES 

TRADING COMM! -=.. N~---:::ai, 

JAMES H. ___ ar No. 177885 

KARIN N. R H, pro hac vice pending 

R. STEPHEN PAINTER, Jr., pro hac vice pendin 

Attorneys for Plaintiff 

COMMODITY FUTURES 

TRADING COMMISSION 

- 47 -

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONET ARY 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS; 

DEMAND FOR JURY TRIAL