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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

 v. 

MAIN AND PROSPECT CAPITAL, 

LLC, 

Defendant. 

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

ORDER GRANTING PLAINTIFF’S 

MOTION FOR DEFAULT 

JUDGMENT AGAINST 

DEFENDANTS DANIEL ADAM 

HEWKO AND MAIN AND 

PROSPECT CAPITAL, LLC 

[DKT. 154] 

RULING 

Before the court is Plaintiff Commodity Futures Trading Commission’s 

(“Plaintiff” or “CFTC”) Amended Motion for Default Judgment (“Motion”) against 

Defendants Main and Prospect Capital, LLC (“MPC”) and Daniel Adam Hewko 

(“Adam Hewko”) (collectively, the “Defaulting Defendants”). Dkt. 154 (Am. Mot.). 

On June 11, 2021, the court found this matter, originally filed as Dkts. 126-128, 

appropriate for resolution without oral argument and vacated the hearing set for June 

18, 2021. Dkt. 130. 

/ / / 

JS-6

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For the reasons stated herein, the court GRANTS Plaintiff’s Motion in its 

entirety. 

BACKGROUND 

I. Procedural History 

On November 13, 2019, Plaintiff filed a Complaint for Injunctive and Other 

Equitable Relief and for Civil Monetary Penalties Under the Commodity Exchange 

Act and Commission Regulations (“Complaint”) against Defendants MPC, Adam 

Hewko, and Daniel Hewko for violations of the Commodity Exchange Act (“Act”), 7 

U.S.C. §§ 1-27f, and its implementing regulations, 17 C.F.R. pts. 1-190. Dkt. 1 

(“Compl.”) 

On January 11, 2020, pursuant to Fed. R. Civ. P. 4(h)(1)(B), a process server 

served MPC by delivering a copy of the Summons and Complaint, and all associated 

papers, to Adam Hewko, MPC’s President and sole officer.1

 Dkt. 25. MPC has failed 

to appear in the action. The court entered default against MPC on May 10, 2021. 

Dkts. 124-125. 

Adam Hewko filed an Answer to the Complaint on March 4, 2020. Dkt. 40. 

On February 22, 2021, Plaintiff filed a motion requesting, inter alia, an order of 

contempt and sanctions against Adam Hewko. Dkts. 100, 101. On March 12, 2021, 

the court ordered Adam Hewko to appear on April 9, 2021, and to show cause why he 

should not be adjudged in contempt. Dkt. 109. Adam Hewko failed to appear at the 

hearing. Dkt. 114. On April 16, 2021, the court found Adam Hewko in contempt, 

struck his Answer, and instructed the court clerk to enter default against him. Dkt. 

1

 Fed. R. Civ. P. 4(h)(1)(A) permits service on a corporation by following state law for 

service where the district court is located or where service is made. Service on MPC 

was proper under California Code of Civil Procedure § 416.20(b) (permitting service 

on a dissolved corporation by delivering a copy of the Summons and Complaint to, as 

provided by Section 2011(b) of the California Corporations Code, “an officer, 

director, or person having charge of its assets or, if no such person can be found, to 

any agent upon whom process might be served at the time of dissolution”). 

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115. Default was entered against Adam Hewko the same day. Dkt. 116. On May 17, 

2021, Plaintiff filed an Application for Default Judgment against the Defaulting 

Defendants. Dkt. 126. 

On June 7, 2022, a Consent Order was ordered as to Adam Hewko’s father and 

codefendant, Daniel Hewko, resolving all of Plaintiff’s claims against Daniel Hewko. 

Dkt. 152. Consequently, on June 15, 2022, the court ordered Plaintiff to file an 

amended and superseding motion as to the Defaulting Defendants. Dkt. 153. 

Accordingly, now before the court is the amended Motion, which was filed on July 1, 

2022. Dkt. 154. 

II. Factual Background 

“The general rule of law is that upon default the factual allegations of the 

complaint, except those relating to the amount of damages, will be taken as true.” 

TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (citation and 

quotation marks omitted). Thus, for purposes of the subject Motion, the court takes 

the following facts pleaded in the Complaint as true: 

In or around August 2014, Defaulting Defendants began seeking investments 

into a pooled investment vehicle operated by MPC and marketed to prospective 

investors as the Global Opportunity Fund (the “Fund”). Compl. ¶ 25. From August 

2014 through at least December 2015, the Defaulting Defendants received more than 

$2.3 million from at least 19 investors for the purpose of investing in the fund. 

Compl. ¶ 26. The investor funds, however, were pooled into MPC’s bank account 

rather than being held in separate accounts in adherence to the guidance set forth by 

the CFTC. Id. 

Adam Hewko is the owner of MPC and had decision-making authority. Id. 

¶ 106. He held himself out to investors as MPC’s Manager, signed documents on 

behalf of the company, and opened and controlled the futures trading account in 

MPC’s name. Id. ¶¶ 106-11. MPC was never registered with the CFTC as a 

community pool operator nor did it ever qualify for any registration exemption. Id. 

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¶ 104. Adam Hewko was never registered with the CFTC as an associated person 

of a commodity pool operator, nor did he qualify for any registration exemption. 

Id. ¶ 105. 

Defaulting Defendants represented to investors their funds would be traded 

using a “global macro strategy.” Id. ¶¶ 29-32. MPC accepted and received funds, at 

least in part, for the purpose of trading futures contracts. Id. ¶ 33. From September 

2014 to November 2014, MPC transferred more than $1.1 million collected from the 

investors into a futures trading account with a Futures Commission Merchant (“FCM1”) registered with the CFTC. Id. ¶ 36. On or around September 2014, Adam Hewko 

confirmed his intention as MPC’s manager to trade futures contracts with the fund’s 

assets; he also stated he was the sole source of MPC’s funds. Id. ¶¶ 37-38. In 

December 2014, he moved the funds from FCM-1 to another account registered with 

the CFTC (“FCM-2”), where they remained until approximately summer 2016. Id. ¶ 

40. The accounts were used to conduct limited trading of futures contracts, including 

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

contract markets. Id. ¶ 41. 

Until January 2016, the Defaulting Defendants did not routinely provide their 

investors with account statements. Id. ¶ 42. Defendants began issuing quarterly 

statements in around January 2016; however, all investment returns claimed in 

account statements provided from fourth quarter 2015 through third quarter 2018 were 

false. Id. ¶¶ 43-46. While the fund suffered losses during this period, investors 

received statements indicating returns with wide ranging percentages of false growth. 

Id. ¶¶ 48-49, 53. For example, account statements for year-end 2015 falsely stated 

that returns “since inception” exceeded 20% for many investors and more than 30% 

for at least one investor, when the funds had only been used to trade a small amount of 

futures contracts in September and October 2014 and January 2015, and incurred 

losses. Id. ¶¶ 54-55. At that time, MPC also provided investors a letter from Adam 

Hewko claiming the fund had “come out on top,” that it had “grown [their] money and 

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will continue to do so,” and that it had “come into a position where income can be 

made available.” Id. ¶¶ 65-66. 

Despite his statements to investors, Adam Hewko wrote in an internal email 

dated January 5, 2016, that MPC had a “loss on the year,” and that MPC could “assign 

50% loss to all [investors] and hope it works out,” but that “I for sure, will be put thru 

the grinder legally.” Id. ¶¶ 56-59, 63, 67. Defaulting Defendants continued sending 

false account statements, quarterly, into 2018. Id. ¶¶ 8, 44, 62, 69, 73, 76. 

Throughout this entire period, Defaulting Defendants knew these statements were 

false, as the fund had never earned any investment gains. Id. ¶¶ 9, 54, 63, 68, 70-72, 

74-75, 77.

Defaulting Defendants did not use investor funds in the manner represented to 

investors, and instead misappropriated funds for the benefit of Adam Hewko, his 

family, and unrelated companies he owned or controlled. Id. ¶ 78. Adam Hewko 

received more than $550,000 in payments from MPC to which he was not entitled, 

and directed the payment of more than $1.2 million from MPC to or for the benefit of 

his unrelated business ventures. Id. ¶¶ 79-83. During this period, Adam Hewko 

repeatedly and falsely told investors MPC could not satisfy any withdrawal requests 

because the fund assets were “in a trade.” Id. ¶¶ 85-87. 

JURISDICTION AND VENUE 

This court has jurisdiction over this action under 28 U.S.C. § 1331 and 28 

U.S.C. § 1345. Section 6c(a) of the Commodity Exchange Act (the “Act”), 7 U.S.C. 

§ 13a-1(a), authorizes the CFTC to seek injunctive and other relief against any person 

whenever it appears to the CFTC that such 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.

Venue properly lies in this district pursuant to 7 U.S.C. § 13a-1(e), because 

Adam Hewko resides in this district, Defaulting Defendants transacted business in this 

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district, and Defaulting Defendants committed certain acts and practices in violation 

of the Act and Regulations in this district. See Compl. ¶¶ 1-2. 

DISCUSSION 

I. Procedural Requirements 

In this district, a motion for a default judgment must be accompanied by a 

declaration in compliance with Fed. R. Civ. P. 55(b)(1) and (2), and include the 

following: 

(a) When and against what party the default was entered; 

(b) The identification of the pleading to which default was entered; 

(c) Whether the defaulting party is an infant or incompetent person, and 

if so, whether that person is represented by a general guardian, 

committee, conservator or other representative; 

(d) That the Servicemembers Civil Relief Act (50 U.S.C. App. § 521) 

does not apply; and 

(e) That notice has been served on the defaulting party, if required by 

[Fed. R. Civ. P.] 55(b)(2). 

Local Rule 55-1. 

The Motion and supporting materials state: (a) default was entered against 

Defendant Adam Hewko on April 16, 2021, and against Defendant MPC on May 10, 

2021; (b) default was entered by a clerk of the court on the operative Complaint; (c) 

Defendants are believed to not be minors or incompetent persons; and (d) the 

Servicemembers Civil Relief Act does not apply to this action. See Dkt. 154-2 (Roth 

Decl.) ¶¶ 11-13, 19-21; Dkts. 116, 125. 

Accordingly, Plaintiff has met the procedural requirements of Local Rule 55-1. 

II. Default Judgment Legal Standard 

The court clerk is generally authorized to enter default judgment at a plaintiff’s 

request against a defendant without a court hearing or judicial action if the claim is for 

“a sum certain or a sum that can be made certain by computation.” Fed. R. Civ. P. 

55(b)(1) (“Rule 55”). In all other cases, the plaintiff must apply to the court for a 

default judgment. Fed. R. Civ. P. 55(b)(2). 

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Rule 55 gives the court considerable discretion as to what it may require as a 

prerequisite to the entry of a default judgment. TeleVideo, 826 F.2d at 917. “The 

court may conduct hearings or make referrals—preserving any federal statutory right 

to a jury trial—when, to enter or effectuate judgment, it needs to: (A) conduct an 

accounting; (B) determine the amount of damages; (C) establish the truth of any 

allegation by evidence; or (D) investigate any other matter.” Fed. R. Civ. P. 55(b)(2) 

(paragraph breaks omitted). “The general rule of law is that upon default the factual 

allegations of the complaint, except those relating to the amount of damages, will be 

taken as true.” TeleVideo, 826 F.2d at 917-18 (citation and quotation marks omitted). 

However, facts which are not established by the pleadings or claims which are not 

well-pleaded cannot support a default judgment. Alan Neuman Prods., Inc. v. 

Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). 

“Factors which may be considered by courts in exercising discretion as to the 

entry of a default judgment include: (1) the possibility of prejudice to the plaintiff, 

(2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, 

(4) the sum of money at stake in the action[,] (5) the possibility of a dispute 

concerning material facts[,] (6) whether the default was due to excusable neglect, and 

(7) the strong policy underlying the Federal Rules of Civil Procedure favoring 

decisions on the merits.” Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 

The court considers the Eitel factors below. 

III. Analysis of Eitel Factors 

A. Possibility of Prejudice to the Plaintiff 

First, the CFTC has established it will be prejudiced and deprived of the 

opportunity to obtain judicial resolution of its claims if the Motion is not granted. 

Adam Hewko’s Answer has been stricken and default entered because of his failure to 

participate fully in discovery and comply with court orders. MPC has failed to appear. 

Absent entry of default judgment, the CFTC would be prejudiced by its inability to 

enforce federal commodities laws efficiently and effectively. See CFTC v. Fin. Tree, 

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No. 2:20-cv-01184-TLN-AC, 2022 WL 36416, at *12 (E.D. Cal. Jan. 4, 2022), report 

and recommendation adopted by 2022 WL 718391 (E.D. Cal. Mar. 9, 2022) (“The 

CFTC has strong, congressionally mandated interests in enforcing the Act, obtaining 

restitution ... for victims of fraud, and deterring future wrongdoing through penalties, 

among other monetary relief.”). 

Thus, the first Eitel factor favors entry of default judgment. 

B. Merits of Plaintiff’s Claims and Sufficiency of the Complaint 

The next two Eitel factors are (1) the merits of the plaintiff’s substantive claim, 

and (2) the sufficiency of the complaint. Eitel, 782 F.2d at 1471-72. The Ninth 

Circuit has suggested these two factors require a plaintiff to “state a claim on which 

the [plaintiff] may recover.” Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978). 

Therefore, the court must evaluate whether the allegations in the Complaint 

sufficiently establish violations of the Commodity Exchange Act and its implementing 

regulations. See Danning, 572 F.2d at 1388. 

Here, the Complaint pleads sufficient facts to state claims for each of the 

violations of the Act and Regulations set forth therein. The court finds the CFTC has 

stated claims upon which it may recover against Defaulting Defendants for violations 

of: Section 6(c)(1), 7 U.S.C. § 9(1) and Regulation 180.1(a), 17 C.F.R. § 180.1(a) 

(fraud by deceptive device or contrivance); Section 4o(1)(a)-(b), 7 U.S.C. § 6o(1)(a)-

(b) (fraud by a commodity pool operator and associated person of a commodity pool 

operator); Section 4m(1), 7 U.S.C. § 6m(1) (failure to register as a community pool 

operator); 7 U.S.C. § 6k(2) and Regulation 3.12, 17 C.F.R. § 3.12 (failure to register 

as an associated person of a community pool operator, and community pool operator 

association with unregistered associated person); Regulation 4.20(a)-(c), 17 C.F.R. 

§ 4.20(a)-(c) (failure to operate pool as separate entity, failure to receive funds in 

pool’s name, commingling pool funds); Regulation 4.21, 17 C.F.R. § 4.21 (failure to 

provide required disclosures); and Regulation 4.22, 17 C.F.R. § 4.22 (failure to 

provide monthly statements). See Dkt. 154-1 (Am. Mot. Br.) at 7-17. 

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Therefore, the second and third Eitel factors favor entry of default judgment. 

C. Sum of Money at Stake 

Next, the court considers “the amount of money at stake in relation to the 

seriousness of [the] [d]efendant’s conduct.” Pepsico, Inc. v. Cal. Sec. Cans, 238 F. 

Supp. 2d 1172, 1176 (C.D. Cal. 2002); see also Eitel, 782 F.2d at 1471-72. 

The amount of money at stake does not warrant denying default judgment. 

Defaulting Defendants’ fraudulent conduct and registration violations constitute core 

violations of the Act and implementing Regulations, and the relief the CFTC seeks is 

reasonable, authorized by the Act and implementing Regulations, and consistent with 

prior default judgment awards in similar CFTC enforcement actions. See, e.g., CFTC 

v. Am. Bullion Exch. ABEX Corp., No. 8:10-cv-01876-DOC (KESx), 2014 WL 

12603558, at *11 (C.D. Cal. Sept. 16, 2014) (entering default judgment for 

Commission and ordering civil monetary penalty exceeding $14 million); CFTC v. 

Safevest, LLC, No. 8:08-cv-00474-JVS (MLGx), 2009 WL 2448116, at *2-5 (C.D. 

Cal. July 13, 2009) (entering default judgment for the Commission and ordering, inter 

alia, restitution of $17.8 million plus pre-judgment interest for a total of $18.4 million, 

and a total civil monetary penalty of $2 million); CFTC v. The Trade Tech Institute, 

Inc., 2:11-cv-02163-GHK (PLAx), 2012 WL 13008332, at *4-5 (C.D. Cal. Jun. 19, 

2012) (default judgment and ordering restitution of $2.3 million and a civil monetary 

penalty of $8.7 million). 

The fourth Eitel factor weighs in favor of entry of default judgment. 

D. Possibility of a Dispute Concerning Material Facts 

The court may also consider whether there is a possibility of a dispute between 

the parties concerning material facts. Eitel, 782 F.2d at 1471-72. Here, MPC never 

appeared in the action, although it was properly served through Adam Hewko. While 

Adam Hewko appeared, his Answer was stricken for failure to comply with this 

court’s orders. Nothing in the record before the court has raised a dispute of material 

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fact. Thus, it appears no genuine dispute of material fact would preclude granting 

Plaintiff’s Motion. 

The fifth Eitel factor weighs in favor of entry of default judgment. 

E. Whether Default Was Due to Excusable Neglect 

Excusable neglect is unlikely when a defendant is properly served and, 

therefore, aware of a plaintiff’s pending action in court. Wecosign, Inc. v. IFG 

Holdings, Inc., 845 F. Supp. 2d 1072, 1082 (C.D. Cal. 2012). Defaulting Defendants 

were properly served with copies of the Summons and Complaint in this matter, but 

MPC failed to answer or defend the action, while Adam Hewko’s Answer was 

stricken and his default entered because of his intentional failure to participate fully in 

discovery and comply with court orders. Dkt. 115. There is no evidence of excusable 

neglect. 

The sixth Eitel factor is met and weighs in favor of entry of default judgment. 

F. Policy Favoring Decisions on the Merits 

“Cases should be decided upon their merits whenever reasonably possible.” 

Eitel, 782 F.2d at 1472. However, “[t]he very fact that [Rule] 55(b) exists shows that 

this preference, standing alone, is not dispositive.” Kloepping v. Fireman’s Fund, No. 

3:94-cv-02684-TEH, 1996 WL 75314, at *3 (N.D. Cal. Feb. 13, 1996). The 

Defaulting Defendants’ intentional decision not to comply with the court’s orders to 

participate in the lawsuit makes it impractical, if not impossible, for the court to render 

a decision on the merits. Accordingly, while the final Eitel factor generally weighs 

against granting default judgment, the court finds this factor is neutral here. 

G. Conclusion on Eitel Factors 

In sum, six of the seven Eitel factors favor entering default judgment against 

Defaulting Defendants, while the final factor, the policy favoring a determination on 

the merits, is neutral. See Eitel, 782 F.2d at 1471-72. The court, therefore, finds it 

appropriate to enter default judgment in Plaintiff’s favor and against the Defaulting 

Defendants. The court now turns to the appropriateness of Plaintiff’s requested relief. 

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IV. Remedies and Damages 

The CFTC seeks a permanent injunction, restitution, and a civil monetary 

penalty against Defaulting Defendants. 

A. Permanent Injunction

Section 6c(a) of the Act authorizes the court to grant permanent injunction. 7 

U.S.C. § 13a-1(a). Pursuant to 7 U.S.C. § 13a-1(a), “[t]he CFTC is entitled to a 

permanent injunction upon a showing that a violation [of the Act or Regulations] has 

occurred and is likely to continue unless enjoined.” CFTC v. Driver, 877 F. Supp. 2d 

968, 981 (C.D. Cal. 2012), aff'd 585 F. App'x 366 (9th Cir. 2014); see also MAI Sys. 

Corp. v. Peak Comput., 991 F.2d 511, 520 (9th Cir. 1993). As a result, “[o]nce a 

violation of the Act has been shown, the moving party need only show the existence 

of some reasonable likelihood of future violations.” CFTC v. Wilson, No. 3:11-cv01651-WQH-BLM, 2011 WL 6398933, at *2 (S.D. Cal. Dec. 20, 2011) (quoting 

CFTC v. Hunt, 591 F.2d 1211, 1220 (7th Cir. 1979)).

The court may infer a likelihood of future violations of the Act and Regulations 

from past unlawful and systematic conduct. See CFTC v. Yu, No. 4:12-cv-03921-

YGR, 2012 WL 3283430, at *4 (N.D. Cal. Aug. 10, 2012). The court may also 

consider “the egregiousness of the defendant’s actions, whether the violation was 

isolated or recurrent, the degree of scienter involved, the sincerity of the defendant’s 

assurances against future violations, the defendant’s recognition of his conduct’s 

wrongfulness, and the likelihood that the defendant’s occupation will present 

opportunities for future violations.” Driver, 877 F. Supp. 2d at 981-82. 

Here, the court finds a permanent injunction prohibiting Defaulting Defendants 

from engaging in future violations of the Act or related regulations, and from trading 

for themselves and others, is warranted. Based on the foregoing numerous statutory 

violations by Defaulting Defendants, it can be presumed that there is a reasonable 

likelihood of future violations, especially considering that Defaulting Defendants have 

either failed to defend themselves in this action or had their Answer stricken for 

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failure to comply with court orders. Defaulting Defendants have not accepted 

responsibility for their wrongful conduct, nor have they provided any assurance 

against future violations. Further, based on the facts alleged in the Complaint, the 

violations of Defaulting Defendants were egregious, intentional, and systemic. 

It, therefore, is appropriate to conclude that Defaulting Defendants are likely to 

continue their pattern of wrongdoing unless permanently enjoined by the court. 

B. Payment of Restitution, Civil Monetary Penalties, and PostJudgment Interest 

The court may rely on declarations in lieu of a damages hearing. See, e.g., 

CFTC v. Emerald Worldwide Holdings, Inc., No. 2:03-cv-08339-AHM (Ex), 2005 

WL 1130588, at *13 (C.D. Cal. Apr. 19, 2005) (finding “no reason to hold an 

evidentiary hearing on damages” because the CFTC-submitted documentary evidence 

was “sufficient” to enter default judgment). The CFTC’s burden in proving up 

damages “is relatively lenient” and need “only prove that the compensation sought 

relates to the damages that flow naturally from the well-pleaded injuries.” SEC v. 

Pedras, No. 2:13-cv-07932-GAF (MRWx), 2014 WL 12597332, at *8 (C.D. Cal. Apr. 

16, 2014) (citations omitted). As evidence of damages, the CFTC filed the 

Declaration of Michael Cazakoff. Dkt. 127 (“Cazakoff Decl.”). The court finds this 

evidence sufficient to establish Plaintiff’s damages and finds no reason to hold an 

evidentiary hearing on this issue. 

1. Restitution 

The CFTC is authorized to seek, and the court to impose, equitable remedies for 

violations of the Act. 7 U.S.C. § 13a-1(d)(3)(A). Those equitable remedies include 

“restitution to persons who have sustained losses proximately caused by such 

violation (in the amount of such losses).” Id. 

As a result of Defaulting Defendants’ conduct, their fund investors incurred net 

losses totaling $1,906,395. Cazakoff Decl. ¶ 9. This figure reflects the total funds 

that were invested ($2,578,250) minus the funds MPC returned to investors 

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($698,959), not including $27,104 refunded to three investors in excess of the 

amounts they originally invested. See id. The court finds these losses are directly 

connected to, and caused by, Defaulting Defendants’ violations of the Act. 

Accordingly, Defaulting Defendants are ordered to pay $1,906,395 on a joint 

and several basis. The court’s separate June 7, 2022 Consent Order requires Daniel 

Hewko to pay restitution in the amount of $500,000, and provides that “[f]or any 

amounts paid by [Adam Hewko and/or MPC] to satisfy their restitution obligations ... 

[Daniel Hewko] shall receive a dollar-for-dollar credit against his Restitution 

Obligation.” Dkt. 152. Likewise, Defaulting Defendants will receive a dollar-fordollar credit against their restitution obligation for any amounts paid by Daniel Hewko 

to satisfy his restitution obligation. 

2. Civil Monetary Penalty 

In actions brought by the CFTC, the court may impose a civil monetary penalty 

(“CMP”) not more than the greater of 1) triple the monetary gain to the person for 

each violation of the Act or Regulations, or 2) $100,000 (adjusted for inflation to 

$185,242) per violation. 7 U.S.C. § 13a-1(d)(1), 17 C.F.R. § 143.8(a)(b)(1). 

When deciding a CMP, the court may consider the gravity of the offense and 

the amount sufficient to act as a deterrent. Miller v. CFTC, 197 F.3d 1227, 1236 (9th 

Cir. 1999). This may include the nature of the violations, whether defendants acted 

with scienter, the consequences of the violations, the financial benefits to defendants, 

and the harm to customers or the market. Am. Bullion Exch., 2014 WL 3896023, at 

*19 (citations omitted). Courts and the CFTC have held that “a high civil monetary 

penalty is warranted where customers have been defrauded of a substantial amount of 

money.” Driver, 877 F. Supp. 2d at 982. 

The CFTC seeks a CMP of approximately three times the amount Defaulting 

Defendants were unjustly enriched. The monetary gain to MPC was the amount 

received from investors, less the amounts returned: $1,906.395. Cazakoff Decl. ¶ 10. 

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Triple the monetary gain to MPC is $5,719,185, and the CFTC requests a rounded 

CMP of $5.7 million, on a joint and several basis. 

Having considered the above factors, the court agrees that Defaulting 

Defendants’ conduct warrants a considerable penalty. Based on the allegations in the 

Complaint and evidence before the court, Defaulting Defendants acted intentionally 

and with scienter, fraudulently solicited over $2 million, misappropriated funds, and 

lied to investors over the course of numerous years. Defaulting Defendants attempted 

to conceal their fraud by providing false account statements representing gains 

between 2016 and 2018, and avoided withdrawal demands by falsely claiming MPC 

fund assets were unavailable because they were in a trade. Additionally, Defaulting 

Defendants have either failed to defend in this action or to comply with court orders. 

In light of the foregoing, the court concludes that a CMP in the amount of three 

times CMP’s gain is an appropriate penalty. Joint and several liability as to MPC’s 

penalty is appropriate given Adam Hewko’s control over MPC. Accordingly, 

Defaulting Defendants are assessed a penalty of $5.7 million on a joint and several 

basis. 

3. Post-Judgment Interest 

The CFTC is also entitled to post-judgment interest on any restitution and CMP 

awards ordered by the court. 28 U.S.C. § 1961(a). The court grants the CFTC’s 

request for post-judgment interest on the full CMP obligation, as well as postjudgment interest on the restitution award of $1,906,395less the amount agreed upon 

in Daniel Hewko’s Consent Order. See Dkt. 152. In light of Daniel Hewko’s 

payment of post-judgment interest on $500,000 of the total restitution, the postjudgment interest for Defaulting Defendants’ is assessed on the remaining restitution 

total of $1,406,395. If the CMP and restitution obligations are not paid immediately, 

post-judgment interest shall accrue beginning on the date of entry of this order and 

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

pursuant to 28 U.S.C. § 1961. 

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IT IS HEREBY ORDERED THAT: 

1. Plaintiff CFTC’s Amended Motion for Default Judgment against 

Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC is GRANTED. 

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

Section 6c of the Act, 7 U.S.C. § 13a-1, Defendants Daniel Adam Hewko and Main 

and Prospect Capital, LLC are 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 in order to make the statements made not untrue or misleading; and/or 

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

180.1(a); and 

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

commerce, as a Commodity Pool Operator (“CPO”) or Commodity Trading 

Advisor (“CTA”) or as an Associated Person (“AP”) of a CPO or CTA, 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 Section 4o(1)(A)-

(B) of the Act, 7 U.S.C. §§ 6o(1)(A)-(B). 

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

Section 6c of the Act, 7 U.S.C. § 13a-1, Defendant Daniel Adam Hewko is 

permanently restrained, enjoined, and prohibited from directly or indirectly: 

a. Being associated with a CPO as a partner, officer, employee, 

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

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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 AP 

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

Regulation 3.12, 17 C.F.R. § 3.12. 

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

Section 6c of the Act, 7 U.S.C. § 13a-1Defendant Main and Prospect Capital, LLC is 

permanently restrained, enjoined, and prohibited from directly or indirectly: 

a. Making use of the mails or any means or instrumentality of 

interstate commerce in connection with its business as a CPO without 

registering as a CPO, in violation of Section 4m(1) of the Act, 7 U.S.C. 

§ 6m(1); 

b. Permitting any person not registered with the Commission to 

become or remain associated with it as an AP of a CPO, when Defendant Main 

and Prospect Capital, LLC knows or should know that such person is not 

registered as an AP of a CPO, in violation Section 4k(2) of the Act, 7 U.S.C. 

§ 6k(2); 

c. Failing to operate a commodity pool as a legal entity separate from 

itself; failing to receive pool participants’ funds in the name of the pool that was 

a legal entity separate from itself; and commingling the property of the pool 

with property of Defendant Main and Prospect Capital, LLC or others, in 

violation of Regulation 4.20, 17 C.F.R. § 4.20; 

d. Failing, in connection with its CPO business, to provide a 

disclosure document to investors or by providing a disclosure that does not 

contain information required by Regulations 4.24 and 4.25, 17 C.F.R. §§ 4.24, 

4.25, in violation of Regulation 4.21, 17 C.F.R § 4.21; and 

e. Failing, in connection with its CPO business, to provide account 

statements and annual reports, as required, and that comply with the 

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requirements of Regulation 4.22, 17 C.F.R. § 4.22, in violation of that 

provision. 

5. Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC 

are permanently restrained, 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)); 

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

that term is defined in Regulation 1.3, 17 C.F.R. § 1.3), for their own account or 

for any account in which they have a direct or indirect interest; 

c. Having any commodity interests traded on their 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; 

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

the purpose of purchasing or selling any commodity interests; 

f. 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); and/or 

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

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

that term is defined in 7 U.S.C. § 1a(38)), 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).

6. Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC 

shall pay, jointly and severally, restitution in the amount of one million nine hundred 

six thousand three hundred ninety-five dollars ($1,906,395) (“Restitution 

Obligation”). If the Restitution Obligation is not paid immediately, post-judgment 

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interest shall accrue on $1,406,395 of the Restitution Obligation beginning on the date 

of entry of this Order and shall be determined by using the Treasury Bill rate 

prevailing on the date of entry of this Order pursuant to 28 U.S.C. § 1961. 

7. For any amounts paid by co-defendant Daniel Hewko to satisfy his 

restitution obligation in this case, as set forth in this court’s Consent Order for 

Permanent Injunction, Civil Monetary Penalty and Other Equitable Relief Against 

Defendant Daniel Hewko (Dkt. 152), Defendants Daniel Adam Hewko and Main and 

Prospect Capital, LLC shall receive a dollar-for-dollar credit against their Restitution 

Obligation. 

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

any restitution payments to Defendant Main and Prospect Capital, LLC’s pool 

participants/clients, the court appoints the National Futures Association (“NFA”) as 

Monitor (“Monitor”). The Monitor shall receive restitution payments from Defaulting 

Defendants 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. 

9. Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC 

shall make Restitution Obligation payments, and any post-judgment interest 

payments, under this Order to the Monitor in the name of “CFTC v. Main and 

Prospect Capital, LLC, et al., case no. 19-cv-9736, 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 case 

name and docket number of this action. Defendants Daniel Adam Hewko and Main 

and Prospect Capital, LLC shall simultaneously transmit copies of the cover letter and 

the form of payment to the Chief Financial Officer, Commodity Futures Trading 

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Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, D.C. 

20581. 

10. 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 Fund investors identified by the Commission or may defer distribution until 

such time as the Monitor deems appropriate. If 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 Fund investors 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 below. 

11. Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC 

shall cooperate with the Monitor as appropriate to provide such information as the 

Monitor deems necessary and appropriate to identify Fund investors to whom the 

Monitor, in its sole discretion, may determine to include in any plan for distribution of 

any Restitution Obligation payments. Defendants Daniel Adam Hewko and Main and 

Prospect Capital, LLC shall execute any documents necessary to release funds they 

have in any repository, bank, investment, or other financial institution, wherever 

located, in order to make partial or total payment toward the Restitution Obligation. 

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

calendar year with a report detailing the disbursement of funds to Fund investors 

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. 

13. The amounts payable to each Fund investor shall not limit the ability of 

any Fund investor from proving that a greater amount is owed from Defaulting 

Defendants or any other person or entity, and nothing herein shall be construed in any 

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way to limit or abridge the rights of any Fund investor that exist under state or 

common law. 

14. Pursuant to Fed. R. Civ. P. 71, each Fund investor who suffered a loss is 

explicitly made an intended third-party beneficiary of this Order and may seek to 

enforce obedience of this Order to obtain satisfaction of any portion of the restitution 

that has not been paid by Defendants Daniel Adam Hewko and Main and Prospect 

Capital, LLC to ensure continued compliance with any provision of this Order and to 

hold Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC in 

contempt for any violations of any provision of this Order. 

15. To the extent any funds accrue to the U.S. Treasury for satisfaction of 

Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC’s Restitution 

Obligation, such funds shall be transferred to the Monitor for disbursement in 

accordance with the procedures set forth above. 

16. The total monetary gain to Defendant Main and Prospect Capital, LLC 

was $1,906,395; triple the monetary gain to Defendant Main and Prospect Capital, 

LLC is $5,719,185. Accordingly, Defendants Daniel Adam Hewko and Main and 

Prospect Capital, LLC shall pay, jointly and severally, a civil monetary penalty in the 

amount of five million, seven hundred thousand dollars ($5,700,000) (“CMP 

Obligation”). If the CMP Obligation is not paid immediately, then post-judgment 

interest shall accrue on the full CMP Obligation beginning on the date of entry of this 

Order and shall be determined by using the Treasury Bill rate prevailing on the date of 

entry of this Order, pursuant to 28 U.S.C. § 1961. 

17. Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC 

shall pay the 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 transfer, then 

the payment shall be made payable to the Commodity Futures Trading Commission 

and sent to the address below: 

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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 

18. If payment by electronic funds transfer is chosen, Defendants Daniel 

Adam Hewko and Main and Prospect Capital, LLC shall contact Tonia King or her 

successor at the address above to receive payment instructions and shall fully comply 

with those instructions. Defendants Daniel Adam Hewko and Main and Prospect 

Capital, LLC shall accompany payment of the CMP Obligation with a cover letter that 

identifies the defendants and the case name and docket number of this action. 

Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC 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. 

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

any partial payment of Defendants Daniel Adam Hewko and Main and Prospect 

Capital, LLC’s Restitution Obligation or CMP Obligation shall not be deemed a 

waiver of Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC’s 

obligation to make further payments pursuant to this Order, or a waiver of the 

Commission’s right to seek to compel payment of any remaining balance. 

20. Any payments received from Defendants Daniel Adam Hewko and Main 

and Prospect Capital, LLC pursuant to this Order shall be applied first to satisfy its 

Restitution Obligation. 

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

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

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Notice to the Commission: 

Manal M. Sultan 

Deputy Director 

Commodity Futures Trading Commission 

290 Broadway, 6th Floor 

New York, NY 10007 

Notice to Defendant Daniel Adam Hewko: 

73 Spring Valley 

Irvine, CA 92602 

Notice to Defendant Main and Prospect Capital, LLC: 

 274 Sunset Ave, Ste. E-313 

Suisun City, CA 94585 

Notice to NFA: 

Daniel Driscoll, Executive Vice President, COO 

National Futures Association 

300 S. Riverside Plaza, Suite 1800 

Chicago, IL 60606-3447 

All such notices to the Commission or the NFA shall reference the case name 

and docket number of this action. 

22. Change of Address/Telephone: Until such time as Defendants Daniel 

Adam Hewko and Main and Prospect Capital, LLC satisfy in full their Restitution 

Obligation and CMP Obligation as set forth in this Order, Defendants Daniel Adam 

Hewko and Main and Prospect Capital, LLC shall provide written notice to the 

Commission by certified mail of any change to their telephone numbers and mailing 

addresses within ten calendar days of the change. 

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

provision or circumstance is held invalid, then the remainder of this Order and the 

application of the provision to any other person or circumstance shall not be affected 

by the holding. 

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

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

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to this action, including any motion by Defendants Daniel Adam Hewko and Main 

and Prospect Capital, LLC to modify or for relief from the terms of this Order. 

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

relief provisions of this Order shall be binding upon Defendants Daniel Adam Hewko 

and Main and Prospect Capital, LLC, upon any person under the authority or control 

of any of Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC, and 

upon any person who receives actual notice of this Order, by personal service, e-mail, 

facsimile or otherwise insofar as he or she is acting in active concert or participation 

with Defendants Daniel Adam Hewko and Main and Prospect Capital, LLC. 

26. The Clerk of the Court is hereby instructed to enter this Order for Final 

Judgment by Default as to Defendants Daniel Adam Hewko and Main and Prospect 

Capital, LLC forthwith and without further notice. 

 IT IS SO ORDERED. 

Dated: August 22, 2022 

 ______________________________ 

 FERNANDO L. AENLLE-ROCHA 

 United States District Judge 

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