1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

 v. 

MAIN & PROSPECT CAPITAL, LLC, 

et al. 

Defendants. 

Case No. 2:19-cv-09736-FLA (AFMx) 

CONSENT ORDER FOR 

PERMANENT INJUNCTION, 

CIVIL MONETARY PENALTY 

AND OTHER EQUITABLE 

RELIEF AGAINST DEFENDANT 

DANIEL HEWKO [DKT. 151] 

I. INTRODUCTION 

 On November 13, 2019, Plaintiff Commodity Futures Trading Commission 

(“Commission” or “CFTC”) filed a Complaint against Defendants Daniel Hewko 

(hereinafter, “Defendant” or “Daniel Hewko”), Daniel Adam Hewko, and Main & 

Prospect Capital, LLC (collectively, “Defendants”) seeking injunctive and other 

equitable relief, as well as the imposition of civil penalties, for violations of the 

Commodity Exchange Act (“Act”), 7 U.S.C. §§ 1–26 (2018), and the Commission’s 

Regulations (“Regulations”) promulgated thereunder, 17 C.F.R. pts. 1–190 (2020). 

/ / /

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 1 of 18 Page ID #:1796
- 2 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

II. CONSENTS AND AGREEMENTS 

To effect settlement of all charges alleged in the Complaint against Defendant 

Daniel Hewko without a trial on the merits or any further judicial proceedings, 

Defendant Daniel Hewko: 

1. Consents to the entry of this Consent Order for Permanent Injunction, 

Civil Monetary Penalty, and Other Equitable Relief Against Defendant Daniel 

Hewko (“Consent Order”); 

2. Affirms he has read and agreed to this Consent Order voluntarily, and 

that no promise, other than as specifically contained herein, or threat has been made 

by the Commission or any member, officer, agent, or representative thereof, or by 

any other person, to induce consent to this Consent Order; 

3. Acknowledges service of the summons and Complaint; 

4. Admits the jurisdiction of this court over him and the subject matter of 

this action pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 (2018); 

5. Admits the jurisdiction of the Commission over the conduct and 

transactions at issue in this action pursuant to the Act; 

6. Admits that venue properly lies with this court pursuant to 7 U.S.C. 

§ 13a-1(e); 

7. Waives: 

(a) Any and all claims that he may possess under the Equal Access to 

Justice Act, 5 U.S.C. § 504 (2012) and 28 U.S.C. § 2412 (2012), 

and/or the rules promulgated by the Commission in conformity 

therewith, Part 148 of the Regulations, 17 C.F.R. pt. 148 (2018), 

relating to, or arising from, this action;

(b) Any and all claims that he may possess under the Small Business 

Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-

121, tit. II, §§ 201–53, 110 Stat. 847, 857–74 (codified as 

amended at 28 U.S.C. § 2412 and in scattered sections of 5 U.S.C. 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 2 of 18 Page ID #:1797
- 3 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

and 15 U.S.C.), relating to, or arising from, this action;

(c) Any claim of Double Jeopardy based upon the institution of this 

action or the entry in this action of any order imposing a civil 

monetary penalty or any other relief, including this Consent 

Order; and

(d) Any and all rights of appeal from this action;

8. Consents to the continued jurisdiction of this court over him for the 

purpose of implementing and enforcing the terms and conditions of this Consent 

Order and for any other purpose relevant to this action, even if Defendant now or in 

the future resides outside the jurisdiction of this court; 

9. Agrees that he will not oppose enforcement of this Consent Order on the 

ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of 

Civil Procedure and hereby waives any objection based thereon; 

10. Agrees that neither he nor any of his agents or employees under his 

authority or control shall take any action or make any public statement denying, 

directly or indirectly, any allegation in the Complaint or the Findings of Fact or 

Conclusions of Law in this Consent Order, or creating or tending to create the 

impression that the Complaint and/or this Consent Order is without a factual basis; 

provided, however, that nothing in this provision shall affect his: (a) testimonial 

obligations; or (b) right to take legal positions in other proceedings to which the 

Commission is not a party. Defendant shall comply with this agreement, and shall 

undertake all steps necessary to ensure that all of his agents and/or employees under 

his authority or control understand and comply with this agreement; 

11. Consents to the entry of this Consent Order without admitting or 

denying the allegations of the Complaint or any findings or conclusions in this 

Consent Order, except as to jurisdiction and venue, which he admits; 

12. Consents to the use of the findings and conclusions in this Consent 

Order in this proceeding and in any other proceeding brought by the Commission or 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 3 of 18 Page ID #:1798
- 4 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

to which the Commission is a party or claimant, and agrees that they shall be taken as 

true and correct and be given preclusive effect therein, without further proof; 

13. Does not consent, however, to the use of this Consent Order, or the 

findings and conclusions herein, as the sole basis for any other proceeding brought by 

the Commission or to which the Commission is a party, other than a: (a) statutory 

disqualification proceeding; (b) proceeding in bankruptcy, or receivership; or (c) 

proceeding to enforce the terms of this Order; 

14. Agrees to provide immediate notice to this court and the Commission by 

certified mail, in the manner required by paragraph 71 of Part VI of this Consent 

Order, of any bankruptcy proceeding filed by, on behalf of, or against him, whether 

inside or outside the United States; and 

15. Agrees that no provision of this Consent Order shall in any way limit or 

impair the ability of any other person or entity to seek any legal or equitable remedy 

against Defendant in any other proceeding.

III. FINDINGS OF FACT AND CONCLUSIONS OF LAW 

 The court, being fully advised in the premises, finds that there is good cause 

for the entry of this Consent Order and that there is no just reason for delay. The 

court therefore directs the entry of the following Findings of Fact, Conclusions of 

Law, permanent injunction, and equitable relief pursuant to Section 6c of the Act, 

7 U.S.C. § 13a-1 (2018), as set forth herein. The findings and conclusions in this 

Consent Order are not binding on any other party to this action. 

THE PARTIES AGREE AND THE COURT HEREBY FINDS: 

A. Findings of Fact 

The Parties to this Consent Order 

16. Plaintiff Commodity Futures Trading Commission is an independent 

federal regulatory agency that is charged by Congress with administering and 

enforcing the Act and the Regulations. 

17. Defendant Daniel Hewko’s last known address is Fort Bragg, California. 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 4 of 18 Page ID #:1799
- 5 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Defendant has never been registered with the Commission in any capacity. 

The Solicitation and Acceptance of Investor Funds 

18. In or around August 2014, Defendant began seeking investments in a 

pooled investment vehicle marketed to prospective investors as the Global 

Opportunity Fund (the “Fund”). 

19. Most, if not all, of the individuals who have invested in the Fund from at 

least August 2014 to the present (the “Relevant Period”) had been tax preparation 

clients of Defendant or individuals whom Defendant knew. Defendant solicited 

funds for participation in the Fund. 

20. Defendant provided documents to investors referring to a “macro 

opportunity,” “global macro opportunities,” “global macro strategy,” and the “Global 

Opportunity Fund.” 

21. Investors were told by Defendant that Fund assets were invested or 

could be invested in commodities. 

22. From in or around September 2014 to in or around November 2014, 

Defendant transferred more than $1.1 million of investor funds into a futures trading 

account with a registered futures commission merchant, referred to herein as “FCM1.” 

23. 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. 

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

/ / / 

/ / / 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 5 of 18 Page ID #:1800
- 6 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Distribution of Account Statements to Investors

25. Prior to January 2016, Fund investors were not routinely provided 

account statements. 

26. In a January 2016 letter to investors that Defendant provided to 

investors, investors were told “[the Fund Manager] know[s] many of you have felt 

like you have been in the dark and . . . [m]oving forward, we will issue quarterly 

statements.” 

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

Defendant emailed investors account statements for the Fund. 

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

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

were false. 

29. 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 in the quarterly statements.

30. In or around January 2016, Defendant emailed investors statements 

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

calendar year 2015, and since the Fund’s inception (referred to herein as the “Q4 

2015 Statements”). 

31. The Q4 2015 Statements reported 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%. All of the claimed 

investment returns in the Q4 2015 Statements were false. 

32. On or about January 5, 2016, and prior to Defendant’s sending investors 

the Q4 2015 Statements, the Fund Manager emailed Defendant, stating that the 

account statement from FCM-2 showed a trading loss and “[f]or all intensive [sic] 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 6 of 18 Page ID #:1801
- 7 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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 . . . .” 

33. Fund quarterly statements for 2016 (referred to herein as the “2016 

Statements”) claimed that the Fund had earned double digit investment returns in 

2016. 

34. However, the Fund had not enjoyed investment gains in 2016. 

35. The 2016 Statement balances that were also inflated by the false returns 

previously reported in the Q4 2015 Statements. 

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

Statements”) claimed that the Fund had earned a total investment return of 12.53% 

for investors in 2017. This was not true. 

37. The 2017 Statement balances were also inflated by the false returns 

previously reported in the Q4 2015 Statements and 2016 Statements. 

38. Quarterly statements in 2018 (“2018 Statements”) similarly claimed that 

the Fund had enjoyed substantial investment gains. 

39. However, the Fund had not actually enjoyed the investment gains 

claimed in the 2018 Statements. 

40. The 2018 Statement balances were also inflated by the false returns 

previously reported in the Q4 2015 Statements, 2016 Statements, and 2017 

Statements. 

Dissipation of Pool Funds 

41. During the Relevant Period, Defendant made payments of Fund assets to 

various entities and individuals. Those entities and individuals were not entitled to 

such payments. 

Communications with Investors Who Sought to Withdraw Their Funds

42. From at least April 2017 through the present, Defendant told Fund 

investors that their withdrawal requests could not be satisfied because Fund assets 

were, in his words, “in a trade.” 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 7 of 18 Page ID #:1802
- 8 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

43. In reality, Fund assets were not actually “in a trade,” but rather had been 

dissipated. 

44. Defendant also made statements to investors about the performance of 

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

funds were not lost or gone, in response to investor requests to withdraw funds, 

which was also not true. 

Defendant Failed to Register with the CFTC 

45. Defendant, in his capacity as a partner, officer, employee, consultant, 

agent (or similar status performing similar functions), has solicited funds, securities, 

or property for participation in a commodity pool. 

46. Defendant has never registered with the Commission as an Associated 

Person of a Commodity Pool Operator and never qualified for any registration 

exemption. 

B. Conclusions of Law 

Jurisdiction and Venue 

47. 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). Section 6c(a) of the Act, 7 U.S.C. § 13a-1(a) (2012), provides that the 

Commission may bring actions for injunctive relief or to enforce compliance with the 

Act or any rule, regulation, or order thereunder in the proper district court of the 

United States 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. 

48. Venue properly lies with this court pursuant to 7 U.S.C. § 13a-1(e), 

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 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 8 of 18 Page ID #:1803
- 9 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

District. 

Fraud by Deceptive Device or Contrivance 

49. By the conduct described in paragraphs 1 through 48 above, Defendant 

violated Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2018), and Regulation 180.1(a), 

17 C.F.R. § 180.1(a) (2020), in that he has 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 by, among other things, intentionally or 

recklessly delivering to Fund investors quarterly statements containing false 

statements concerning investment gains, when in fact the Fund had not earned gains; 

misappropriating Fund assets; telling investors, falsely, that the Fund would (or did) 

pursue certain investment strategies, when in fact the Fund simply dissipated Fund 

assets; and telling Fund investors, falsely, that the Fund had not been able to satisfy 

withdrawal requests because the Fund was “in a trade.” 

Fraud and Deceit by an Associated Person of a Commodity Pool Operator 

50. By that same conduct, Defendant has violated Section 4o(1)(A) and (B) 

of the Act, 7 U.S.C. § 6o(1)(A), (B) (2018), in that he has, while acting as an 

Associated Person of a Commodity Pool Operator, used the mails or any means or 

instrumentality of interstate commerce (including email) to employ a device, scheme, 

or artifice to defraud Fund participants and engaged in a transaction, practice, or 

course of business which operated as a fraud or deceit upon Fund participants 

 Failure to Register with the Commission 

51. By the conduct described in paragraphs 1 through 50 above, Defendant 

violated Section 4k(2) of the Act, 7 U.S.C. § 6k(2) (2018), and Regulation 3.12, 17 

C.F.R. § 3.12 (2020), by, acting as an Associated Person of a Commodity Pool 

Operator, by soliciting funds, securities, or property for a Commodity Pool without 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 9 of 18 Page ID #:1804
- 10 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

being registered with the Commission as an Associated Person of a Commodity Pool 

Operator. 

52. Unless restrained and enjoined by this court, there is a reasonable 

likelihood that Defendant will continue to engage in the acts and practices alleged in 

the Complaint and in similar acts and practices in violation of the Act and 

Regulations. 

IV. PERMANENT INJUNCTION 

IT IS HEREBY ORDERED THAT: 

53. Based upon and in connection with the foregoing conduct, pursuant to 

Section 6c of the Act, 7 U.S.C. § 13a-1 (2018), Defendant is permanently restrained, 

enjoined and prohibited from directly or indirectly:

a. Using or employing (or attempting to use or employ) a device, scheme, 

or artifice to defraud any person; making (or attempting to make) untrue 

or misleading statements of material fact or omitting to state a material 

fact necessary in order to make the statements made not untrue or 

misleading; and engaging (or attempting to engage) in transactions, 

practices, or courses of business that operate as a fraud or deceit on any 

person, in violation of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2018), 

and Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2020); 

b. Using the mails or any means or instrumentality of interstate commerce, 

as a commodity pool operator or commodity trading advisor or as an 

associated person of a commodity pool operator or commodity trading 

advisor, to employ a device, scheme, or artifice to defraud any client or 

participant or prospective client or participant, or 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, 

in violation of Sections 4o(1)(A) and (B), 7 U.S.C. § 6o(1)(A), (B) 

(2020); and 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 10 of 18 Page ID

#:1805
- 11 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

c. Being associated with a Commodity Pool Operator as a partner, officer, 

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

or performing similar functions), in any capacity involving 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 registered with the Commission as an Associated Person of a 

Commodity Pool Operator, in violation of Section 6k(2) of the Act, 7 

U.S.C. § 6k(2) (2018) and Regulation 3.12, 17 C.F.R. § 3.12 (2020). 

54. Defendant is also permanently restrained, enjoined and prohibited from 

directly or indirectly: 

a. Applying for registration or claiming exemption from registration with 

the Commission in any capacity, and engaging in any activity requiring 

such registration or exemption from registration with the Commission, 

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

(2020); and/or 

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

17 C.F.R. § 3.1(a) (2020)), agent or any other officer or employee of any 

person (as that term is defined in Section 1a(38) of the Act, 7 U.S.C. 

§ 1a(38) (2018), registered, exempted from registration or required to be 

registered with the Commission except as provided for in 17 C.F.R. 

§ 4.14(a)(9). 

55. Defendant is also for a period of ten years enjoined and prohibited from 

directly or indirectly: 

a. Trading on or subject to the rules of any registered entity (as that term is 

defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40) (2018)); 

b. Entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2020)), for his own 

personal account or for any account in which he has a direct or indirect 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 11 of 18 Page ID

#:1806
- 12 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

interest; 

c. Having any commodity interests traded on his behalf; 

d. Controlling or directing the trading for or on behalf of any other person 

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

involving commodity interests; and/or 

e. Soliciting, receiving or accepting any funds from any person for the 

purpose of purchasing or selling any commodity interests. 

V. RESTITUTION, DISGORGEMENT, 

AND CIVIL MONETARY PENALTY 

A. Restitution 

56. Defendant shall pay restitution in the amount of five hundred thousand 

dollars ($500,000) (“Restitution Obligation”). If the Restitution Obligation is not 

paid immediately, post-judgment interest shall accrue on the Restitution Obligation 

beginning on the date of entry of this Consent Order and shall be determined by using 

the Treasury Bill rate prevailing on the date of entry of this Consent Order pursuant 

to 28 U.S.C. § 1961 (2018). 

57. For any amounts paid by Codefendants Daniel Adam Hewko and/or 

Main & Prospect Capital, LLC to satisfy their restitution obligations in this case, 

Defendant shall receive a dollar-for-dollar credit against his Restitution Obligation. 

58. To effect payment of the Restitution Obligation and the distribution of 

any restitution payments to Fund investors (“pool participants”), the court appoints 

the National Futures Association (“NFA”) as Monitor (“Monitor”). The Monitor 

shall receive restitution payments from Defendant and make distributions as set forth 

below. Because the Monitor is acting as an officer of this court in performing these 

services, the NFA shall not be liable for any action or inaction arising from NFA’s 

appointment as Monitor, other than actions involving fraud. 

59. Defendant shall make Restitution Obligation payments, and any postjudgment interest payments, under this Consent Order to the Monitor in the name 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 12 of 18 Page ID

#:1807
- 13 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

“CFTC v. MPC, et al., 19cv9736, Restitution Fund” and shall send such payments by 

electronic funds transfer, or by U.S. postal money order, certified check, bank 

cashier’s check, or bank money order, to the Office of Administration, National 

Futures Association, 300 South Riverside Plaza, Suite 1800, Chicago, Illinois 60606 

under cover letter that identifies the paying Defendant and the name and docket 

number of this proceeding. Defendant shall simultaneously transmit copies of the 

cover letter and the form of payment to the Chief Financial Officer, Commodity 

Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

60. The Monitor shall oversee the Restitution Obligation and shall have the 

discretion to determine the manner of distribution of such funds in an equitable 

fashion to pool participants identified by the Commission or may defer distribution 

until such time as the Monitor deems appropriate. In the event that the amount of 

Restitution Obligation payments to the Monitor are of a de minimis nature such that 

the Monitor determines that the administrative cost of making a distribution to 

eligible pool participants is impractical, the Monitor may, in its discretion, treat such 

restitution payments as civil monetary penalty payments, which the Monitor shall 

forward to the Commission following the instructions for civil monetary penalty 

payments set forth in Part B below. 

61. Defendant shall cooperate with the Monitor as appropriate to provide 

such information as the Monitor deems necessary and appropriate to identify pool 

participants to whom the Monitor, in its sole discretion, may determine to include in 

any plan for distribution of any Restitution Obligation payments. Defendant shall 

execute any documents necessary to release funds that he has in any repository, bank, 

investment or other financial institution, wherever located, in order to make partial or 

total payment toward the Restitution Obligation. 

62. The Monitor shall provide the Commission at the beginning of each 

calendar year with a report detailing the disbursement of funds to pool participants 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 13 of 18 Page ID

#:1808
- 14 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

during the previous year. The Monitor shall transmit this report under a cover letter 

that identifies the name and docket number of this proceeding to the Chief Financial 

Officer, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st 

Street, NW, Washington, D.C. 20581. 

63. The amounts payable to each pool participant shall not limit the ability 

of any pool participant from proving that a greater amount is owed from Defendant or 

any other person or entity, and nothing herein shall be construed in any way to limit 

or abridge the rights of any pool participant that exist under state or common law. 

64. Pursuant to Rule 71 of the Federal Rules of Civil Procedure, each pool 

participant who suffered a loss is explicitly made an intended third-party beneficiary 

of this Consent Order and may seek to enforce obedience of this Consent Order to 

obtain satisfaction of any portion of the restitution that has not been paid by 

Defendant to ensure continued compliance with any provision of this Consent Order 

and to hold Defendant in contempt for any violations of any provision of this Consent 

Order. 

65. To the extent that any funds accrue to the U.S. Treasury for satisfaction 

of Defendant’s Restitution Obligation, such funds shall be transferred to the Monitor 

for disbursement in accordance with the procedures set forth above. 

B. Civil Monetary Penalty 

66. Defendant shall pay a civil monetary penalty in the amount of one 

hundred seven thousand five hundred dollars ($107,500) (“CMP Obligation”). If the 

CMP Obligation is not paid immediately, then post-judgment interest shall accrue on 

the CMP Obligation beginning on the date of entry of this Consent Order and shall be 

determined by using the Treasury Bill rate prevailing on the date of entry of this 

Consent Order pursuant to 28 U.S.C. § 1961 (2018). 

67. Defendant shall pay his CMP Obligation and any post-judgment interest, 

by electronic funds transfer, U.S. postal money order, certified check, bank cashier’s 

check, or bank money order. If payment is to be made other than by electronic funds 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 14 of 18 Page ID

#:1809
- 15 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

transfer, then the payment shall be made payable to the Commodity Futures Trading 

Commission and sent to the address below: 

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

HQ Room 266 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 fax 

9-AMC-AR-CFTC@faa.gov 

68. If payment by electronic funds transfer is chosen, Defendant shall 

contact Tonia King or her successor at the address above to receive payment 

instructions and shall fully comply with those instructions. Defendant shall 

accompany payment of the CMP Obligation with a cover letter that identifies 

Defendant and the name and docket number of this proceeding. Defendant shall 

simultaneously transmit copies of the cover letter and the form of payment to the 

Chief Financial Officer, Commodity Futures Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW, Washington, D.C. 20581. 

C. Provisions Related to Monetary Sanctions 

69. Partial Satisfaction: Acceptance by the Commission or the Monitor of 

any partial payment of Defendant’s Restitution Obligation or CMP Obligation shall 

not be deemed a waiver of his obligation to make further payments pursuant to this 

Consent Order, or a waiver of the Commission’s right to seek to compel payment of 

any remaining balance. 

D. Cooperation 

70. Defendant shall cooperate fully and expeditiously with the Commission, 

including the Commission’s Division of Enforcement, in this action, and in any 

current or future Commission investigation or action related thereto. Defendant shall 

also cooperate in any investigation, civil litigation, or administrative matter related to, 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 15 of 18 Page ID

#:1810
- 16 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

or arising from, this action.

VI. MISCELLANEOUS PROVISIONS 

71. Notice: All notices required to be given by any provision in this 

Consent Order shall be sent certified mail, return receipt requested, as follows: 

Notice to Commission: 

Manal M. Sultan, Deputy Director 

Division of Enforcement 

Commodity Futures Trading Commission 

290 Broadway, 6th Floor 

New York, NY 10007

Notice to Defendant: 

Vinoo P. Varghese, Esq. 

Varghese & Associates, P.C. 

2 Wall Street 

New York, NY 10005 

 

All such notices to the Commission shall reference the name and docket number of 

this action.

72. Change of Address/Phone: Until such time as Defendant satisfies in full 

his Restitution Obligation and CMP Obligation as set forth in this Consent Order, 

Defendant shall provide written notice to the Commission by certified mail of any 

change to his telephone number and mailing address within ten calendar days of the 

change. 

73. Entire Agreement and Amendments: This Consent Order incorporates 

all of the terms and conditions of the settlement among the parties hereto to date. 

Nothing shall serve to amend or modify this Consent Order in any respect 

whatsoever, unless: (a) reduced to writing; (b) signed by all parties hereto; and 

(c) approved by order of this court. 

74. Invalidation: If any provision of this Consent Order or if the application 

of any provision or circumstance is held invalid, then the remainder of this Consent 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 16 of 18 Page ID

#:1811
- 17 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Order and the application of the provision to any other person or circumstance shall 

not be affected by the holding. 

75. Waiver: The failure of any party to this Consent Order or of any pool 

participant at any time to require performance of any provision of this Consent Order 

shall in no manner affect the right of the party or pool participant at a later time to 

enforce the same or any other provision of this Consent Order. No waiver in one or 

more instances of the breach of any provision contained in this Consent Order shall

be deemed to be or construed as a further or continuing waiver of such breach or 

waiver of the breach of any other provision of this Consent Order. 

76. Continuing Jurisdiction of this Court: This court shall retain jurisdiction 

of this action to ensure compliance with this Consent Order and for all other purposes 

related to this action, including any motion by Defendant to modify or for relief from 

the terms of this Consent Order. 

77. Injunctive and Equitable Relief Provisions: The injunctive and equitable 

relief provisions of this Consent Order shall be binding upon Defendant, upon any 

person under his authority or control, and upon any person who receives actual notice of 

this Consent Order, by personal service, e-mail, facsimile or otherwise insofar as he or 

she is acting in active concert or participation with Defendant. 

78. Counterparts and Facsimile Execution: This Consent Order may be 

executed in two or more counterparts, all of which shall be considered one and the 

same agreement and shall become effective when one or more counterparts have been 

signed by each of the parties hereto and delivered (by facsimile, e-mail, or otherwise) 

to the other party, it being understood that all parties need not sign the same 

counterpart. Any counterpart or other signature to this Consent Order that is 

delivered by any means shall be deemed for all purposes as constituting good and 

valid execution and delivery by such party of this Consent Order. 

79. Contempt: Defendant understands that the terms of the Consent Order 

are enforceable through contempt proceedings, and that, in any such proceedings he 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 17 of 18 Page ID

#:1812
- 18 - 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

may not challenge the validity of this Consent Order. 

80. Agreements and Undertakings: Defendant shall comply with all of the 

undertakings and agreements set forth in this Consent Order. 

There being no just reason for delay, the Clerk of the Court is hereby ordered 

to enter this Consent Order for Permanent Injunction, Civil Monetary Penalty and 

Other Equitable Relief Against Defendant Daniel Hewko forthwith and without 

further notice. 

Dated: June 7, 2022 

 

 _____________________________ 

 FERNANDO L. AENLLE-ROCHA 

 United States District Judge 

Case 2:19-cv-09736-FLA-AFM Document 152 Filed 06/07/22 Page 18 of 18 Page ID

#:1813