UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Commodity Futures Trading Commission, 

Plaintiff,

v.

Long Leaf Trading Group, Inc., James A. 

Donelson, Timothy M. Evans, Jeremy S. 

Ruth, and Andrew D. Nelson, 

Defendants.

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Case No. 20-3758

Hon. Thomas A. Durkin

PLAINTIFF CFTC’S REPLY IN SUPPORT OF ITS MOTION FOR PARTIAL 

SUMMARY JUDGMENT AGAINST DEFENDANT JEREMY S. RUTH

Ruth’s response to the CFTC’s motion for partial summary judgment makes clear there is 

no genuine issue of material fact for trial on the CFTC’s fraud claims against Ruth. Ruth has 

submitted no evidence in support of his opposition, and fails to cite evidence already in the 

record. Ruth’s arguments are irrelevant or wrong, and Ruth’s factual assertions are contradicted 

by his sworn testimony, as well as his communications with customers and prospective

customers of Long Leaf. Accordingly, the CFTC respectfully requests that the Court grant the 

CFTC’s motion for partial summary judgement.

I. ANALYSIS

A. Ruth fails to create a genuine issue of material fact that he made the complained-of 

statements to customers and prospective customers. 

Ruth argues that the CFTC has identified as false or misleading only five statements 

made by Ruth to just three customers. (Doc. 99, Def. Ruth’s Resp. to CFTC’s Mot. for Summ. J. 

(hereinafter, “Ruth Resp.”) at 4.) This is wrong. 

The statements identified by the CFTC as false or misleading include Ruth’s claims that:

• Long Leaf “wouldn’t have the ability to work with hundreds of clients month after month 

for six years and oversee millions of dollars if we weren’t being profitable for them;” 

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• Long Leaf’s trading program was based on a “strong statistical likelihood” of winning 

three out of every four trades, thus providing a “much more predictable path to success;” 

and

• it is “very easy to ... accomplish 12% [returns] on an annual basis.” 

(Doc. 76, CFTC’s Mot. for Summ. J. Against Def. Ruth (hereinafter, “CFTC Mot.”) at 5.) These 

statements were set forth in scripts and presentations provided to Ruth by Long Leaf. (Doc. 97, 

Def. Ruth’s Resp. to CFTC’s Statement of Facts (hereinafter, “Ruth SOF Resp.”) ¶¶ 16-19.) 

Ruth does not dispute that he followed the scripts and presentations, and made these and other,

similar statements to customers and prospective customers throughout his tenure at Long Leaf.1 

(Id. ¶¶ 16, 19-20.) The statements to specific, individual customers featured in the CFTC’s 

motion were meant to serve as examples, and Ruth admits to having made them. (Id. ¶¶ 21-25.)

Ruth complains that the CFTC “does not present the full context of [each] conversation.” 

(Id. ¶¶ 21-25.) Ruth does not explain how that context would serve to make his statements not 

false or misleading. In any event, the CFTC has provided “full context” by filing the unedited 

recording of each cited conversation. (See Doc. 83, Digital Exhibit Information Form for CFTC 

Exs. 153, 155, 352.) 

 1 Ruth suggests that he “may not have made each of the statements described by the CFTC” after Long 

Leaf made changes to the solicitation process in mid-2016. (Doc. 98, Def. Ruth’s Statement of 

Additional Facts (hereinafter, “Ruth SOAF”) ¶ 24.) The undisputed facts show that he did; one of the 

calls highlighted by the CFTC in its motion is from August 2017. (Doc. 97, Ruth SOF Resp. ¶¶ 23-24.) 

In any event, Ruth has failed to create a genuine issue of fact on this point. See Boykin v. Chess, No. 16 

CV 50161, 2020 WL 419408, at *3 (N.D. Ill. Jan. 27, 2020) (Durkin, J.) (“[A] witness’s inability to recall 

something will not create a fact issue in the face of affirmative evidence of the fact.”).

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B. There is no genuine issue of material fact that Ruth’s statements were false or

misleading.

Ruth’s rosy statements about historical and potential profits of Long Leaf’s trading 

program were false or misleading because substantially all customers who participated in the 

program lost money. (Doc. 76, CFTC Mot. at 5-6.) Ruth complains that the CFTC “does not 

say whether [Ruth’s] customers lost money or whether there was any time during which those 

customers’ accounts were actually making money.” (Doc. 99, Ruth Resp. at 2-3 (emphasis 

omitted); see also id. at 5-6.) The CFTC does say this. 

In support of its motion, the CFTC adduced a declaration from investigator Joseph J. 

Patrick. (Doc. 76-23, CFTC Ex. 535.) In the declaration, Mr. Patrick set forth loss numbers for 

all customers who participated in Long Leaf’s trading program. (Id. ¶ 7.) This necessarily 

includes Ruth’s customers. Ruth does not attempt to call the accuracy of Mr. Patrick’s 

declaration into question. Nor does Ruth attempted to explain why the performance of his 

customers’ accounts would have differed from the overall performance of customers in the 

program. It would not have done, because all program participants received the same trading 

recommendations.2

 (Doc. 76-1, CFTC SOF ¶ 9.)

As for a time when customer accounts were making money, Mr. Patrick’s declaration 

summarizes cumulative and monthly trading results for program participants. (Doc. 76-23, 

CFTC Ex. 535.) From June 2015 through August 2017—the period of Ruth’s tenure at Long 

Leaf—customer accounts were down, i.e., running cumulative losses, for twenty-five out of 

 2 Ruth disputes this. (Doc. 97, Ruth SOF Resp. ¶ 9.) In his testimony, however, Ruth said that customers 

received the same set of recommendations every month: “Q: I mean, for the Time Means Money 

program, right, substantially all of those customers get the same four trade recommendations every 

month, is that right? A: Essentially, yeah.” (Doc. 76-21, CFTC Ex. 533, Ruth Test. at 102:1 – 102:6.) 

Ruth’s testimony must prevail over his unsupported denial in opposition to summary judgment. See, e.g., 

FTC v. Bay Area Bus. Council, Inc., 423 F.3d 627, 634 (7th Cir. 2005) (holding that a part cannot create 

an issue of fact with an affidavit containing conclusions that contradict sworn testimony).

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twenty-six months, for total losses of approximately $3.1 million. (Id. at 10-11 (“Long Leaf 

Trading Monthly and Cumulative Profits and Losses (PNL) of Participants in the Trading 

Program June 2015 ‐ December 2019”).) The handful of individual months with profitable 

trading results were never profitable enough to outstrip much greater losses from previous or 

subsequent months. (Id.)

Ruth has failed to adduce any evidence to controvert Mr. Patrick’s analysis. Ruth offers 

no evidence, and does not claim, that any customer of Long Leaf traded profitably under the 

program at any particular time. As such, Ruth has failed to create a genuine issue of material 

fact that his statements about Long Leaf’s trading program—e.g., that Long Leaf’ was “trading 

profitably” for customers—were anything other than false or misleading. 

Ruth argues that certain of his statements, i.e., the “strong statistical likelihood” of 

success, or that it would be “easy” to achieve annual returns of 12%, were not false or 

misleading because they were “hypothetical” scenarios meant to illustrate Long Leaf’s “trade 

design.” (Doc. 99, Ruth Resp. at 5-6.) This argument is unavailing to Ruth. Whatever the 

“math” behind Long Leaf’s trade design may have been, customers did not benefit from any 

statistical advantage, nor did any customer enjoy an annual return of 12%. (See Doc. 76-23, 

CFTC Ex. 535, Patrick Decl.) Ruth does not offer evidence—or even suggest—that they did.3

 

These statements about potential profits had no basis in fact, and are therefore false or 

misleading as a matter of law. See CFTC v. Matrix Trading Grp., Inc., No. 00-8880-CIV, 2002 

WL 31936799, at *6 (S.D. Fla. Oct. 3, 2002) (“[T]he misstatements and omissions regarding 

 3 Ruth argues that materiality is a question of fact for the jury. (Doc. 99, Ruth Resp. at 7.) Not here. It is 

well-settled that “representations about profit potential and risk go to the heart of a customer’s investment 

decision and are therefore material as a matter of law.” See CFTC v. Kratville, 796 F.3d 873, 895 (8th 

Cir. 2015).

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profit potential, risk of loss, and performance record by the Defendants were material because a 

reasonable investor would have relied on these statements in determining whether to invest ....”); 

SEC v. Falor, No. 1:09-CV-5644, 2010 WL 3385510, at *4 (N.D. Ill. Aug. 19, 2010) (denying 

motion to dismiss where defendant made “financial projections” but “lacked any reasonable 

basis to assume that the promised returns would materialize.”).

4

C. Ruth has failed to create an issue of fact as to scienter.

Ruth claims that when he started at Long Leaf, he had never worked in finance and had 

“no reason” to believe that his statements were false or misleading because Long Leaf’s scripts 

and presentations “had been approved by [then-CEO] Evans ... and the National Futures 

Association.” (Doc. 99, Ruth Resp. at 8-9.) 

Ruth offers no evidence to support these assertions. Whether statements in Long Leaf’s

solicitation materials were “approved” by Evans or the National Futures Association (“NFA”) is, 

in any event, unavailing to Ruth. That is because Ruth knew those statements were false.5

Ruth admits that he received account statements for his customers; Ruth does not dispute 

that those statements showed ongoing losses resulting from the trading program. (Doc. 97, Ruth 

SOF Resp. ¶ 29.) Ruth claims, however, that for the majority of his tenure at Long Leaf he did 

 4 See also, e.g., SEC v. Kirkland, 521 F. Supp. 2d 1281, 1298 (M.D. Fla. 2007) (granting summary 

judgment for SEC where defendant touted expected profits; “though the ... the ads often utilized the 

single words ‘projected’ or ‘estimated,’ projections are nonetheless actionable as misrepresentations if 

there is no reasonable basis to support them”); SEC v. USA Real Est. Fund 1, Inc., 30 F. Supp. 3d 1026, 

1034 (E.D. Wash. 2014) (granting summary judgment for SEC; “had investors known that his basis for 

projecting the unrealistically high returns was [defendant’s] personal belief, they could have understood 

the real risk of giving their money to [defendant]”); SEC v. Constantin, 939 F. Supp. 2d 288, 306 

(S.D.N.Y. 2013) (granting summary judgment for SEC where defendant “had no basis for [ ] optimistic

projections”); SEC v. Concorde Am., Inc., No. 05-80128-CIV, 2007 WL 9706715, at *3 (S.D. Fla. July 

19, 2007) (granting summary judgment for SEC where defendant had “no basis for making [ ]

projections”; “[t]he fact that the company had no revenue to speak of and was still in a start-up phase at 

the time a prospectus report is projecting millions is profit is a fact that investors would value”).

5 Ruth does not claim that Evans ever told him the trading program generated profits for customers. 

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not understand how to “interpret” the statements and thus “did not know the outcome of his 

customers’ trades.” (Id. ¶¶ 28-29.) This is not a helpful fact for Ruth. If true, it means that Ruth 

made statements about the historical and potential profitability of the program with no basis to 

do so. That is fraud. See CFTC v. Heffernan, 245 F. Supp. 2d 1276, 1294 (S.D. Ga. 2003) 

(granting summary judgment where defendant’s “statements are misleading because he has no 

basis for his claims that he traded profitably”). Moreover, Ruth’s claim that he did not 

understand his customers’ account statements is undermined by the fact that Ruth became a 

“Series 3 licensed broker” shortly before starting at Long Leaf.6 (Doc. 98, Ruth SOAF ¶ 1.) 

Regardless of whether Ruth understood the account statements, Ruth knew that 

customers were losing money in the trading program. Ruth knew this from his very earliest days 

at Long Leaf. Ruth does not dispute that his own grandfather participated in Long Leaf’s trading 

program in November 2015, just a few months after Ruth started, and lost all but $54 of his 

$5,000 investment by June 2016. (Doc. 97, Ruth SOF Resp. ¶¶ 30-31.) Ruth likewise does not 

dispute that he received calls and emails from Long Leaf customers complaining about account 

performance. (Id. ¶¶ 32-35.) Ruth disputes that he received these complaints “frequently” (id. ¶ 

32), but that is contrary to his deposition testimony7

:

Q Mr. Ruth, ... did you receive complaints from customers about account 

performance while you were at Long Leaf?

A How do you define complaints?

Q Customers expressing displeasure about poor account performance.

A Yeah, all the -- frequently, yeah.

 6 The “Series 3” is the National Commodities Futures Exam, administered by the NFA, the futures 

industry self-regulatory organization. 

7 As such, it must be disregarded by the Court. See Bay Area Bus. Council, Inc., 423 F.3d at 634.

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(Doc. 76-21, CFTC Ex. 533, Ruth Test. at 155:18 – 155:24.) Moreover, Ruth admits that in 

March 2017 he started using spreadsheets to track losses from Long Leaf’s recommended trades.

(Doc. 97, Ruth SOF Resp. ¶¶ 37-38, 40.) As such, there is no genuine issue of fact that Ruth

knew his statements to customers about historical and potential profits from the Long Leaf 

trading program were false or misleading. 

D. Ruth made a material omission by failing to disclose that substantially all customers 

lose money participating in the program. 

Ruth argues that he was not required to disclose to customers or prospective customers 

that “other TMM customers lost money.” (Doc. 99, Ruth Resp. at 8.) This is wrong. A 

reasonable investor would consider it important in deciding whether to participate in the program 

that substantially all customers had lost money doing so. See CFTC v. R.J. Fitzgerald & Co., 

310 F.3d 1321, 1332-33 (11th Cir. 2002).8

 Ruth’s failure to disclose this constitutes the

omission of a material fact without the disclosure of which Ruth’s statements touting historical 

and potential returns were false or misleading. 

Ruth argues that disclosure of a “track record” would be impossible because every 

customer “executed different trade options scaled to their preference.” (Doc. 99, Ruth Resp. at 

8.) This is a straw man. The basis for the CFTC’s fraudulent omission claim is not that Ruth 

failed to provide a “track record.” Rather, it is that Ruth made statements to customers touting 

the purported advantages of Long Leaf’s trading program—including statements that Long Leaf 

 8 See also CFTC v. Risk Cap. Trading Grp., Inc., 452 F. Supp. 2d 1229, 1245 (N.D. Ga. 2006) (“Siegel’s 

nondisclosure of his and Risk Capital’s track record-which the Court found he knew by the fall of 2002-

was a material omission of fact. Plaintiff established that approximately 97% of Risk Capital’s customers 

lost money.”); Matrix Trading Grp., 2002 WL 31936799, at *8 (“Given that 92% of Matrix's customers 

lost money and that those losses began accruing from the outset, and given that Matrix’s principals either 

were aware or should have been aware of the true state of affairs, this Court finds that their claims of 

profit and profit potential were made with knowledge of their falsity or, at the very least, with reckless 

disregard for the truth.”).

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had traded profitably for customers in the past and that it would be “easy” to generate returns of 

12%—without disclosing that substantially all customers lost money participating in it.9

E. Ruth’s unsupported statements about customers do not create an issue of material 

fact.

Ruth makes a number of unsupported assertions about the characteristics of Long Leaf 

customers. These are easily disposed of. 

First, Ruth claims that Long Leaf customers “were typically not novice investors” (Doc. 

98, Ruth SOAF ¶ 7.) Ruth fails to substantiate this with evidence or citation to the record. Ruth 

also fails to explain how this fact, if true, is availing to him. To the extent it is meant to suggest 

that Long Leaf customers did not rely on Ruth’s misrepresentation, reasonable reliance is not an 

element the CFTC must prove. See Slusser v. CFTC, 210 F.3d 783, 786 (7th Cir. 2000). To the 

extent it is meant to suggest that Ruth’s misstatements were not material because customers

should have known better, Ruth fails to explain how. The fact that an investor is “not a novice” 

does not imbue them with knowledge of Long Leaf’s dismal trading record—a fact that was 

deliberately concealed from customers and prospective customers. (Doc. 97, Ruth SOF Resp. ¶ 

43.) See Matrix Trading Grp., 2002 WL 31936799, at *7 (“The experience level of a customer 

does not vitiate the materiality of misrepresentations.”). 

Next, Ruth asserts that Long Leaf customers received “many risk disclosure statements” 

(Doc. 98, Ruth SOAF ¶¶ 5-6.) Ruth fails to attach or even describe these risk disclosures. The 

only risk disclosures in the record (all submitted by the CFTC) consist of generic, boilerplate 

 9 It is not, of course, impossible to provide a track record for program participants. 17 C.F.R. § 4.31(a)

provides that a CTA who offers participation in a trading program is required to disclose, inter alia: (1) 

the annual and year-to-date rate of return for the program specified for the five most recent calendar years 

and year-to-date, computed on a compounded monthly basis, and with monthly rates of return; and (2) the 

number of accounts traded pursuant to the offered trading program that were opened and closed with a 

negative net lifetime rate of return as of the date the account was closed. 17 C.F.R. § 4.35(a)(1).

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disclaimers warning of the “risk of loss” from futures or options trading. (See, e.g., Doc. 76-12, 

CFTC Ex. 134 at 4 (solicitation script); Doc. 76-13, CFTC Ex. 141 at 4 (solicitation power 

point); Doc. 76-17, CFTC Ex. 330 at 3 (email exchange with customer).) It is well-settled that 

such disclosures do not absolve a defendant of liability for making false or misleading statements 

or omissions. See CFTC v. Int’l Fin. Servs. (N.Y.), Inc., 323 F. Supp. 2d 482, 501–02 (S.D.N.Y. 

2004) (granting summary judgment for CFTC where “risk disclosure and customer account 

statements ... do not disclose the actual material facts: that IFS Inc. adopted trading practices 

deliberately designed to make clients lose their money, while maximizing commissions for IFS 

Inc.”).

10 

Finally, Ruth points out that Long Leaf customers received daily and monthly account 

statements; the customers approved all recommended trades and had the ability to stop 

participating in the program or withdraw their money. (Doc. 99, Ruth Resp. at 2.) Once again, 

Ruth fails to support this with citation to the record. Nonetheless, Ruth’s argument is unavailing. 

Nothing about a customer’s account statements would provide the customer with the critical 

knowledge that substantially all trading program participants had lost money.

F. The undisputed facts establish that Long Leaf was a CTA.

Ruth argues that he cannot be liable for aiding and abetting Long Leaf’s CTA fraud 

because Long Leaf was not a CTA. (Id. at 10.) Ruth makes no legal or factual argument, but 

seeks to incorporate by reference Defendants Long Leaf and Donelson’s arguments on this point. 

 10 See also, e.g., CFTC v. Am. Bullion Exch. ABEX, Corp., No. SACV101876DOCRNBX, 2013 WL 

12139086, at *3 (C.D. Cal. Oct. 17, 2013) (“Boilerplate risk disclosures do not make for an ironclad 

defense to liability.”); Risk Cap. Trading Grp., 452 F. Supp. 2d at 1244 (“Notwithstanding the abundance 

of these risk disclosures, [defendant] is not insulated from liability.”); Matrix Trading Grp., 2002 WL 

31936799, at *7 (“[T]he Court finds that the boilerplate risk disclosure language used by the Defendants 

does not overcome the material misrepresentations made by the Defendants and the Matrix APs.”).

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(Id.) Unfortunately for Ruth, there is nothing to incorporate. (Doc. 96, Def. Donelson Resp. to 

CFTC’s Mot. for Summ. J. at 7 n.4 (expressly disclaiming any arguments with respect to the 

Long Leaf’s CTA status pre-December 2018).) Regardless, the only facts that matter for 

establishing Long Leaf’s status as a CTA are whether Long Leaf (1) engaged in the business of 

advising customers with respect to trading options on commodity futures, and (2) did so for 

compensation or profit. See 7 U.S.C. § 1a(12)(A)(i), (ii). The undisputed facts show that Long 

Leaf did both. (Doc. 97, Ruth SOF Resp. ¶¶ 8, 13.)

More substantively, Ruth argues that he did not “aid and abet” Long Leaf because the 

statements he made were set forth in scripts and presentations provided by management, and 

Ruth had “no management or decision-making authority at Long Leaf.” (Doc. 99, Ruth Resp. at 

10.) This is what the Seventh Circuit referred to as the “I am just a copying machine” defense. 

SEC v. Lyttle, 538 F.3d 601, 604 (7th Cir. 2008) (affirming summary judgment for SEC on fraud 

claims). It is well-settled that “[o]ne doesn’t have to be the inventor of a lie to be responsible for 

knowingly repeating it to a dupe.” Id.

II. CONCLUSION

Ruth has failed to create a genuine issue of material fact with respect to CFTC’s claims 

for options fraud, in violation of 7 U.S.C. § 6c(b) and 17 C.F.R. § 33.10, or CTA fraud (via 

aiding and abetting), in violation of 7 U.S.C. § 6o(1). Accordingly, and for the foregoing 

reasons, the CFTC respectful requests that the Court grant the CFTC’s motion for partial 

summary judgment against Ruth, finding Ruth liable for the foregoing violations of the Act and 

Regulations and entering an order requiring Ruth to pay $301,541.39 in restitution and 

disgorgement. 

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/s/ Ashley J. Burden

Ashley J. Burden

aburden@cftc.gov

Elizabeth M. Streit

estreit@cftc.gov

Jody Platt

jplatt@cftc.gov

Counsel for Plaintiff CFTC

Commodity Futures Trading Commission

Division of Enforcement

525 W. Monroe St., Ste. 1100

Chicago, IL 60661

(312) 596-0700

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CERTIFICATE OF SERVICE

I hereby certify that on March 25, 2022, I provided service to the persons listed below, 

and by the following means:

Via the Court’s electronic CM/ECF system: Via email, pursuant to D.E. 13, to:

Jim Falvey 

Falvey Law Office

200 S. Wacker Dr., Ste. 3100

Chicago, IL 60606-5877

jimfalvey@yahoo.com

Counsel to Long Leaf Trading Group, Inc. 

and James A. Donelson

Andrew D. Nelson

267 May St. E.

Elmhurst, IL 60126

adnelson0503@gmail.com

Pro se

Via email, pursuant to agreement, to:

Jeremey S. Ruth

11220 Brista Way

Austin, TX 78726

jeremysruth@hotmail.com

Pro se

/s/ Ashley J. Burden

Ashley J. Burden

Commodity Futures Trading Commission

Division of Enforcement

525 W. Monroe St., Ste. 1100

Chicago, IL 60661

(312) 596-0700

aburden@cftc.gov

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