CFTC Ex. 

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 1 of 115 PageID #:2048
Long Leaf Trading Group

Ruth, Jeremy 2019-09-26

9/26/2019 9:50 AM

Condensed Transcript

Prepared by:

Ashley Burden

CFTC

Friday, October 29, 2021

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 2 of 115 PageID #:2049
Page 1

1 UNITED STATES OF AMERICA

 BEFORE THE

2 COMMODITY FUTURES TRADING COMMISSION

3

4 IN THE MATTER OF: )

 )

5 LONG LEAF TRADING GROUP, INC. )

6

7

8

9

10

11 The examination under oath of JEREMY

12 RUTH, taken pursuant to subpoena and the rules

13 of the U.S. Commodity Futures Trading Commission,

14 reported by Mary Maslowski, a Certified Shorthand

15 Reporter and Notary Public within and for the County

16 of Cook and State of Illinois, at 525 West Monroe

17 Street, 9th Floor, Chicago, Illinois, commencing at

18 the hour of 9:50 o'clock on September 26, 2019.

19

20

21

22

23

24

Page 2

1 A P P E A R A N C E S:

2

 MR. ASHLEY J. BURDEN, Senior Trial Attorney

3 MS. ELIZABETH M. STREIT, Trial Team Leader

 MR. JOSEPH J. PATRICK, Investigator

4 U.S. COMMODITY FUTURES TRADING COMMISSION

 DIVISION OF ENFORCEMENT

5 525 West Monroe Street, Suite 1100

 Chicago, Illinois 60661

6 (312) 596-0700

7

 On behalf of the U.S. Commodity

8 Futures Trading Commission;

9

 CHUHAK & TECSON, P.C.

10 BY MR. ANDREW S. MAY

 30 South Wacker Drive, Suite 2600

11 Chicago, Illinois 60606

 (312) 855-6105 (direct)

12 amay@chuhak.com

13

 On behalf of the Witness.

14

15

16

17

18

19

20

21

22

23 CSR License No. 084-003278.

24

Page 3

1 I N D E X

2 WITNESS EXAMINATION

3 JEREMY RUTH

4 By Mr. Burden 4, 99, 211

5 By Mr. Patrick 93, 209

6

 E X H I B I T S

7 CFTC EXHIBIT MARKED FOR ID

8 No. 1 5

 No. 116 6

9 No. 117 8

 No. 118 6 0

10 No. 119 6 8

 No. 120 8 3

11 No. 121 1 0 4

 No. 122 1 2 4

12 No. 123 1 2 7

 No. 124 1 5 6

13 No. 125 1 6 2

 No. 126 1 6 7

14 No. 127 1 7 1

 No. 128 1 7 3

15 No. 129 1 7 4

 No. 130 1 7 7

16 No. 131 1 8 0

 No. 132 1 8 4

17 ** No. 133 193

 No. 134 2 2 7

18

19

20

 ** NOTE: Exh bit No. 133 is an audio file

21 which was not tendered for inclusion

 in the transcript.

22

23

24

Page 4

1 JEREMY RUTH,

2 called as a witness herein, having been first duly

3 sworn, was examined and testified as follows:

4 EXAMINATION

5 BY MR. BURDEN:

6 Q All right. Mr. Ruth, I'm Ashley

7 Burden. This is Joe Patrick and Beth Streit. We

8 are officers of the Commission for the purposes of

9 this proceeding. This is an investigation by the

10 United States Commodity Futures Trading Commission

11 in the matter of Long Leaf Trading Group to

12 determine whether there have been violations of

13 certain provisions of the Commodity Exchange Act

14 and regulations. However, the facts developed in

15 this investigation might constitute violations of

16 other federal or state, civil or criminal laws.

17 Prior to the opening of the

18 record you were provided with a copy of the

19 formal order of investigation in this matter. It

20 will be available for your examination during the

21 course of this proceeding. Mr. Ruth, have you had

22 an opportunity to review the formal order?

23 A Is that what I just reviewed?

24 Q Yes.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 1 - 4

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 3 of 115 PageID #:2050
Page 5

1 MR. MAY: The document that he just

2 handed us, yes.

3 (Whereupon CFTC Exhibit No. 1 w a s

4 marked for identification, MM.)

5 BY MR. BURDEN:

6 Q All right. I want to hand you what I've

7 marked as CFTC Exhibit 1.

8 MR. MAY: Are we sharing or do you have

9 copies for counsel?

10 MR. BURDEN: I have copies for counsel,

11 of course.

12 MR. MAY: Okay.

13 BY MR. BURDEN:

14 Q Mr. Ruth, prior to the opening

15 of the record you were provided with a copy of

16 the Commission's Statement to Persons Providing

17 Information about Themselves to the CFTC. A copy

18 of that statement has been marked as Exhibit No. 1.

19 Mr. Ruth, have you had the opportunity

20 to read Exhibit No. 1?

21 A Yes.

22 Q All right. Do you have any questions

23 about the exhibit?

24 A No.

Page 6

1 Q Mr. Ruth, are you represented by counsel?

2 A Yes.

3 MR. BURDEN: All right. Mr. May, would

4 you please identify yourself for the record.

5 MR. MAY: Sure. Andrew May, Chuhak &

6 Tecson, 30 South Wacker, Suite 26, Chicago,

7 Illinois, 60606. The number is (312) 855-6105.

8 (Whereupon CFTC Exhibit No. 116 w a s

9 marked for identification, MM.)

10 BY MR. BURDEN:

11 Q All right. Mr. Ruth, I want to hand

12 you what I've marked as CFTC Exhibit 116. Mr. Ruth,

13 is this a copy of the subpoena that you're appearing

14 pursuant to here today?

15 A Yes.

16 Q Mr. Ruth, the subpoena calls for a

17 production of certain documents, and you'll see a

18 list of them appended to the subpoena on Exhibit A.

19 Have you tendered to the Staff all documents called

20 for by the subpoena, which currently is none?

21 A I gave them to my attorney for review.

22 MR. BURDEN: All right. Mr. May, will

23 we be receiving a production from --

24 MR. MAY: Yes.

Page 7

1 MR. BURDEN: All right. Are you

2 holding in your hand the production for

3 Mr. Ruth?

4 MR. MAY: I am. Maybe I'll just describe

5 it. It's been Bates stamped Ruth 001 through

6 Ruth 056.

7 MR. BURDEN: All right. Do you know

8 what would be good I think? Do you have an

9 electronic version of those?

10 MR. MAY: That is the problem I had,

11 getting it on the memory stick.

12 MR. BURDEN: It is no problem at all.

13 Is that everything?

14 MR. MAY: It is.

15 MR. BURDEN: Well, I'll tell you what.

16 How about I take that off of you. I'll mark

17 it as an exhibit, and then we'll just scan --

18 MR. MAY: Do you want to use -- do you

19 want to use it as a number or a letter?

20 MR. BURDEN: I'm sorry?

21 MR. MAY: You're going to be using it --

22 Okay. So --

23 MR. BURDEN: I don't know if we'll have

24 an opportunity to use these during testimony,

Page 8

1 there's that many. So we'll try to look into

2 it over lunch.

3 MR. MAY: Sure.

4 MR. BURDEN: The production date was

5 earlier --

6 MR. MAY: Yeah, that did not get diaried

7 by our office.

8 MR. BURDEN: Sorry?

9 MR. MAY: That did not get diaried by

10 our office, the production date.

11 MR. BURDEN: That's okay. I'm not

12 going to bust your chops about it, but it may

13 require Mr. Ruth to return, though hopefully

14 not.

15 (Whereupon CFTC Exhibit No. 117 w a s

16 marked for identification, MM.)

17 Q All right. Mr. Ruth, I'm going to

18 hand you what I've marked as CFTC Exhibit 117.

19 Do you recognize Exhibit 117?

20 MR. MAY: Can I ask you, you don't

21 mind me marking on these?

22 MR. BURDEN: No, you go right ahead.

23 Now, we can't let you take them with you,

24 but whatever you need to do on them. We'll

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 5 - 8

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 4 of 115 PageID #:2051
Page 9

1 just throw them out when you're done.

2 MR. MAY: Okay.

3 A Yes, I recognize it.

4 BY MR. BURDEN:

5 Q Can you tell me what Exhibit 117 i s ,

6 please.

7 A The documents that I'm providing in

8 response to the subpoena.

9 Q All right. And is this, the documents

10 we see in Exhibit 117, is that the sum total of the

11 responsive documents to the CFTC's subpoena?

12 MR. MAY: Are you having -- do you have

13 a question for me?

14 THE WITNESS: Yes.

15 MR. MAY: Okay. Do you mind if I ask

16 him some questions?

17 MR. BURDEN: We don't usually allow it,

18 but it seems like --

19 MR. MAY: No.

20 MR. BURDEN: -- it might be appropriate.

21 MR. MAY: Yeah.

22 MR. BURDEN: So go right ahead, Mr. May.

23 MR. MAY: So, Mr. Ruth, did you tender

24 a number of documents to me to assist you in

Page 10

1 complying with the subpoena?

2 THE WITNESS: Yes.

3 MR. MAY: And did I review the subpoena

4 and decide on your behalf what documents were

5 responsive and which ones weren't?

6 THE WITNESS: Yes.

7 MR. MAY: Okay. And the documents that

8 we're tendering to the CFTC is essentially the

9 documents that I've come to the conclusion are

10 responsive?

11 THE WITNESS: Yes.

12 MR. MAY: Okay.

13 MR. BURDEN: All right. So thank you,

14 Mr. May.

15 Q So the subpoena essentially calls

16 for all documents in your possession relating to

17 Long Leaf Trading?

18 A Um-hmm.

19 Q Yes?

20 A That is my understanding, yes.

21 Q All right. So are all of those documents

22 in CFTC Exhibit 117?

23 A The documents that I gave to Mr. May,

24 the ones that he determined were responsive to the

Page 11

1 subpoena are here.

2 Q Got it. So there's no more documents

3 you expect to produce?

4 A Not to my understanding.

5 Q Okay. Mr. Ruth, have you withheld any

6 documents called for by the subpoena based on any

7 claim of privilege?

8 A What do you mean by privilege?

9 Q I'm sure you will have talked

10 about this with your counsel but attorney-client

11 privilege, the Fifth Amendment privilege against

12 self-incrimination?

13 A No.

14 Q All right. So if you would, please,

15 please describe the search that was conducted for

16 the subpoenaed records.

17 A What do you mean by that?

18 Q Well, the documents we see in

19 Exhibit 117, those are documents that you found

20 and you gave them to your lawyer and your lawyer

21 produced them to us, right?

22 A Correct.

23 Q So where did you get those documents

24 from in 117? Were they maybe in a file drawer?

Page 12

1 Were they on your computer? Where did you find

2 them?

3 A I mean, they were predominantly emails

4 between me and principals and former principals and

5 attorneys of Long Leaf Trading Group.

6 Q Okay. So you looked in your email account,

7 correct?

8 A Yeah, correct.

9 Q And what's the address for that email

10 account?

11 A Jeremysruth@hotmail.com.

12 Q And do you have any other email accounts?

13 Why is that funny?

14 A I don't know. Hotmail's really old.

15 Q It is. I always laugh when I see a

16 Hotmail or a Yahoo.

17 A Yeah.

18 Q All right. So you looked in your Hotmail

19 account, right?

20 A Yeah.

21 Q Where else did you look for responsive

22 documents?

23 A Well, the only other documents that

24 I would have had would be with a Long Leaf email

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 9 - 12

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 5 of 115 PageID #:2052
Page 13

1 account, which I don't have access to because I'm

2 not, I guess, affiliated with them.

3 Q Got it.

4 MR. MAY: So you didn't produce those?

5 THE WITNESS: No.

6 BY MR. BURDEN:

7 Q And you can't produce them because you

8 don't have access --

9 A Right.

10 Q -- to that email address, right?

11 A Right. I just have -- these are

12 the only emails that I have in my personal stuff

13 or any documents that I have.

14 Q Got it. So do you have any physical

15 files in your home or office?

16 A No.

17 Q Any paper copies of documents?

18 A No. That was -- as you'll see from these

19 documents, it's prevented from that happening.

20 Q Why is that?

21 A It's a violation of their, I don't know,

22 protocols I guess.

23 Q So did you have any documents that

24 you used at Long Leaf that you maybe took home

Page 14

1 in a bag or that you put in a file?

2 A No, no, no.

3 Q Do you know of any documents responsive

4 to the subpoena but not provided that were in your

5 possession at some other time but have since been

6 lost or destroyed or disposed of? Maybe you threw

7 them away or you moved, anything like that?

8 A I mean, there's obviously documents

9 when I was -- I don't know if you want to call

10 it an employee or independent contractor of Long

11 Leaf Trading Group, but I don't have any of those

12 documents.

13 Q Well, did you take any of those documents

14 home?

15 A No.

16 Q At any point?

17 A No. I mean, I don't know if no

18 is right. I don't have any, but I don't recall.

19 I mean, maybe one day I brought a document home

20 but ...

21 Q And maybe you threw it away but you

22 don't remember either way, correct?

23 A Correct. Yeah, I don't.

24 Q All right. Have you ever given sworn

Page 15

1 testimony before, Mr. Ruth?

2 A No.

3 Q All right. So I'm sure your counsel

4 went over these with you, but for the record I want

5 to do some quick rules of the road.

6 A Okay.

7 Q So the first is be sure to answer

8 my questions verbally, please. There's a natural

9 tendency to nod or shake your head or in my case,

10 you know, make an affirmative noise. So say yes or

11 no. Give your answer. Do you understand?

12 A Yes.

13 Q All right. You and I should try not

14 to talk over each other. I'm the guy that does

15 this the most, so I'll be extra mindful of it. But

16 I'm sure our court reporter, Mary Maslowski, will

17 remind us if we start doing that.

18 A Okay.

19 Q And you know what a good rule of thumb

20 is, and I'm sure your lawyer already told you, is

21 if I ask you a question, take a breath, then answer

22 it, you know. I don't want to ask you any questions

23 in testimony that confuse you or that you don't

24 understand. So do you promise that if something

Page 16

1 confuses you, you'll tell me?

2 A Yes.

3 Q All right. So what I want to do first

4 is talk a little about your personal background,

5 your education, your professional credentials and

6 then we're going to move on to Long Leaf Trading,

7 all right?

8 A All right.

9 Q All right. So, Mr. Ruth, what is the

10 highest level of education you received, please.

11 A High school diploma.

12 Q Any college in there?

13 A Yeah.

14 Q How much, please.

15 A 98 percent completion.

16 Q All right. So three or four years then?

17 A Yes.

18 Q And where did you attend college?

19 A College of DuPage and the University

20 of Houston.

21 Q And what did you study there, please.

22 A Hotel and restaurant management.

23 Q What professional licenses or

24 certifications do you hold?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 13 - 16

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 6 of 115 PageID #:2053
Page 17

1 A Currently nothing I guess you could say.

2 Q I ought to know this, but do you currently

3 hold a Series 3 or did you let that lapse?

4 A It's an interesting situation. I don't

5 know if it ever lapsed, but I'm not currently

6 registered with the NFA.

7 Q Got it, okay. But do you have a Series 3

8 license currently?

9 A I mean --

10 MR. MAY: Can I ask a question?

11 A -- I've passed the Series 3 test, yes.

12 MR. MAY: Okay. That's where I was going

13 to go. Okay.

14 A But I don't think they like give you

15 a license so ...

16 BY MR. BURDEN:

17 Q All right. Any other operational

18 licenses or certifications that you've previously

19 held?

20 A I was certified in sanitation in the

21 state of Illinois.

22 Q What else, please.

23 A I think that's it.

24 Q All right. So let's talk a bit,

Page 18

1 if we could, please, about your professional

2 background. During what period of time did you

3 work for Long Leaf Trading?

4 A March 13, 2015 to a day in late August

5 of 2017.

6 Q All right. So what did you do before you

7 joined Long Leaf Trading, please.

8 A I worked in like the internet marketing

9 industry.

10 Q Okay. Can you be a little more specific,

11 please. Like what company, how about that?

12 A I worked for a company called Yodle.

13 Q What did Yodle do, please.

14 A Internet marketing for small to medium15 sized businesses.

16 Q Was there anything in particular they

17 focused on?

18 A Google AdWords.

19 Q Okay. So it's not like finance stuff.

20 It's just sort of general internet marketing, is

21 that fair to say?

22 A Yes.

23 Q All right. And how long did you work

24 for Yodle, please.

Page 19

1 A One year.

2 Q All right. What did you do before Yodle?

3 A I worked in real estate, which going

4 back means I had a professional license in the state

5 of Texas to be a real estate agent.

6 Q All right. And before real estate?

7 A I worked in the restaurant industry.

8 Q Okay. So was Long Leaf Trading your

9 first experience working for a financial firm?

10 A Yes.

11 Q All right. What did you do after you

12 left Long Leaf Trading?

13 A I went to Postrock Brokerage.

14 Q And how long did you work at Postrock

15 Brokerage for?

16 A So I think it would be like the first

17 week of September of 2017 until May 2nd of 2019.

18 Q All right. So what have you done

19 since -- what have you been doing since May of

20 2019, please.

21 A I've been trying to open up my own GIB.

22 Q And who would be the guarantor of that GIB?

23 A Multiple people that I'm trying

24 to guarantee my IB, multiple different FCMs.

Page 20

1 Q Got it. So have you settled on one yet

2 or is that still in the works?

3 THE WITNESS: How do I answer that

4 question?

5 MR. MAY: To the best of your ability.

6 A Yeah. I mean, I'm trying to. I'm having

7 some issues getting registered.

8 BY MR. BURDEN:

9 Q Why is that?

10 A I don't know. I was hoping maybe you

11 guys could fill me in on that.

12 Q I mean, we can't answer any questions

13 but --

14 A Yeah. I'm in the dark on --

15 Q I don't know.

16 A -- a lot of things that are going on.

17 Q So you're not currently registered,

18 correct?

19 A No.

20 Q All right. So let's talk about

21 your experience trading options sort of generally.

22 So it sounds like when you started working at Long

23 Leaf Trading, that was your first experience with

24 options, is that right?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 17 - 20

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 7 of 115 PageID #:2054
Page 21

1 A Correct.

2 Q Have you traded personally in any

3 futures or options products for your own account?

4 A With real money, no.

5 Q What about for the accounts of others?

6 A Have I traded personally for the accounts

7 of others? No, I don't think so.

8 Q All right.

9 A Like are you asking if I had like

10 discretionary --

11 Q Yeah, sure. You know, what I'm trying

12 to ascertain is your knowledge and experience with

13 respect to options trading. I understand that you

14 worked for Long Leaf Trading as a senior broker,

15 is that correct?

16 A Yeah. I mean, that might be like a

17 self-designated title, but yeah.

18 Q And we'll get into that, right? That's

19 why you're here.

20 A Yeah.

21 Q But, otherwise, I want to know have

22 you done any options trading for yourself? And it

23 sounds like the answer's no, correct?

24 A No, no.

Page 22

1 Q Have you done any trading for other

2 people, perhaps clients or family or friends or

3 anything like that?

4 A Yeah. I mean, I think that's where

5 I need clarification. Like I -- the accounts

6 I opened are self-directed accounts in a broker7 assisted environment so -- but I didn't -- the trade

8 ideas and all that kind of stuff came from another

9 person.

10 Q Got it. I understand. Thank you.

11 The work you did for Postrock, can you describe

12 that, please.

13 A I was an associated person.

14 Q And did you do the same type of work at

15 Postrock that you did at Long Leaf Trading, i.e.,

16 sales?

17 A I guess what do you mean by the same?

18 What did I do at Long Leaf?

19 Q Yeah, yeah. What was your -- we want

20 to get into Long Leaf, but I want to quickly touch

21 on Postrock. What was your job title at Postrock?

22 A Just associated person.

23 Q All right. And what were your

24 responsibilities, please.

Page 23

1 A Well, I mean, it's not like the

2 firm gave me responsibilities. So it's whatever

3 you want to -- you know, my goal is to acquire

4 clients and have them generate, you know, revenues

5 for the firm and myself.

6 Q All right.

7 A Yeah.

8 Q So your customers at Postrock -- did you

9 have customers at Postrock?

10 A Yes.

11 Q All right. So did they trade in options?

12 A Yes.

13 Q All right. Did they trade out-of-the-money

14 option spreads?

15 A Out-of-the-money option spreads.

16 MR. MAY: And we're talking about

17 at Postrock.

18 A At Postrock?

19 BY MR. BURDEN:

20 Q Yeah.

21 A I mean, I'm not 100 percent positive

22 if I could use the word out of the money, but they

23 traded option spreads.

24 Q Got it.

Page 24

1 A Probably some were in the money and out

2 of the money, yeah.

3 Q So at Postrock were your clients also

4 broker-assisted clients?

5 A Yes.

6 Q Got it. All right. So let's talk about

7 Long Leaf Trading, if we could, please. So I think

8 you testified that you worked at Long Leaf Trading

9 from March 13th of 2015 through sometime into late

10 August of 2017, is that right?

11 A Yeah. I mean, I became an associated

12 person I don't think until like April 24th or

13 26th of 2015. So, I mean, before that I was just

14 studying for the Series 3 and sitting there and

15 watching what was going on. I don't know if I was

16 technically employed.

17 Q All right. So what was your job title

18 when you started at Long Leaf Trading?

19 A I don't know. Associated person,

20 commodities associate, something like that.

21 Q All right. And did that title change

22 when you were registered as an associated person?

23 A I mean, we didn't really do titles.

24 We just -- kind of just some day like, you know,

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 21 - 24

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 8 of 115 PageID #:2055
Page 25

1 we were commodity associates and then some day

2 we woke up and said, well, we're senior commodity

3 associates.

4 Q Yeah, I was going to ask about that.

5 So is that a meaningful distinction, senior --

6 A No, I don't think so. I don't know.

7 Q Was that a title you gave yourself?

8 A Probably, yeah.

9 Q All right. So when you started in

10 March of 2015, what were your responsibilities?

11 What did you do at Long Leaf Trading?

12 A I was studying for the Series 3.

13 Q What else did you do?

14 A Got people coffee.

15 Q What else?

16 A That was pretty much it.

17 Q All right. And were you paid for that?

18 A Interesting question. I think the

19 deal that I had was if I passed the Series 3,

20 I would be compensated. But I ended up failing the

21 Series 3 the first time I took it, so I don't think

22 I was compensated. And then I passed the Series 3

23 the second time I took it.

24 Q All right. And after you passed

Page 26

1 the Series 3, was that when you were registered

2 as an associated person?

3 A I would -- yeah, I would assume so, yeah.

4 Q That's right?

5 A That I was an associated person after

6 I passed the Series 3?

7 Q Correct.

8 A Yeah. I mean, that was the whole

9 purpose of getting the Series 3, was to be an

10 associated person, yeah.

11 Q So when did you pass that Series 3 then,

12 please.

13 A I can't remember the exact date, but

14 I would assume my NFA record reflects it. But I

15 think it's April 24th, if I'm not mistaken, 2015.

16 I wouldn't hold me to that but it's --

17 Q I'm sorry. I thought you testified

18 that you were registered as an AP in April of 2016.

19 Was it 2015?

20 A 2015.

21 Q There we go. That makes a lot more

22 sense. So for a month you were kind of hanging out,

23 getting coffee, studying for your Series 3 and not

24 being compensated, correct?

Page 27

1 A I was supposed to be compensated

2 in the event that I passed my Series 3 on the first

3 try, but I didn't.

4 Q Oh, so you were getting retroactive comp

5 if you passed, correct?

6 A Yeah, I think something of that nature.

7 Q All right. And you didn't the first

8 time --

9 A No.

10 Q -- but you passed eventually, correct?

11 A Yes.

12 Q All right. So when did you

13 begin -- or I should ask instead when you

14 started as an associated person, what were your

15 job responsibilities then?

16 A To bring in customers.

17 Q Did you have any other responsibilities?

18 A I mean, it's -- I think at the time

19 there was like three or four associated persons

20 and then, you know, the owner, principal, the

21 compliance officer. So, I mean, I don't know. Just

22 like general office stuff. I think they designated

23 me maybe as like the IT guy.

24 Q All right. So one of your tasks

Page 28

1 was to bring in customers, right?

2 A Yeah.

3 Q And you sort of had an informal role

4 as an IT person, is that correct?

5 A Yeah, like fixing computers and making

6 sure that they can print and stuff like that, yeah.

7 Q What else did you do?

8 A Just learned, studied, talked to people.

9 That's about it.

10 Q All right. Was your primary responsibility

11 to bring in customers?

12 A Yeah, that's what I was hired to do, yes.

13 Q All right. And was that your primary

14 responsibility through April of 2015 until you left

15 the firm?

16 A I think you have those dates -- I left

17 the firm in August of 2017.

18 Q I understand. I mean, was bringing

19 in customers your primary job duty from the time

20 that you were registered as an AP in April of '15?

21 A Yeah, yeah, I could -- I mean, you could

22 say that, yeah.

23 Q All right. At Long Leaf Trading who

24 supervised you, please.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 25 - 28

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 9 of 115 PageID #:2056
Page 29

1 A Tim Evans and towards the end of my

2 tenure Brian Adams as well.

3 Q Any other supervisors during your tenure

4 at Long Leaf?

5 A No, no.

6 Q And did you supervise anybody at Long Leaf?

7 A I mean, I had the same job title

8 as a lot of people but, I mean, my personality

9 might -- I don't know, could be perceived as.

10 But, I mean, I was never given like an official

11 supervisor designation.

12 Q Let me ask you this. Who, stepping

13 back to supervising again, who hired you at Long

14 Leaf Trading?

15 A Tim Evans.

16 Q Did you ultimately quit or were you fired?

17 A I don't know how to answer that question.

18 It's one of those, you know --

19 Q I'll ask you what happened later, how

20 about that?

21 A Yeah, it's -- I don't know. He --

22 I don't know. I guess if you were to reflect the

23 record, maybe I'm fired but ...

24 Q Who fired you?

Page 30

1 A Tim Evans.

2 Q There we go. All right. Getting

3 back to the question of people that you supervised,

4 were there any employees at Long Leaf Trading or

5 contractors or people who worked there that reported

6 to you?

7 A Well, I'm not saying that I supervised

8 anybody.

9 Q Well, that's not what I'm asking,

10 right? Is there anybody that reported to you?

11 A No. I mean, like not -- like if you're

12 talking like standard like corporate structure,

13 like pyramids or something, am I above anybody,

14 no, that's not how it worked.

15 Q All right.

16 A Like did I collaborate with other people,

17 yes, but it's not like they reported to me.

18 Q Was there anybody at Long Leaf Trading

19 who did work for you?

20 A Again, we -- it's a team-based environment,

21 so I don't know.

22 Q All right. Let's talk about your comp

23 at Long Leaf Trading, if we could, please. What was

24 the basis for your compensation?

Page 31

1 A What do you mean by that?

2 Q Well, did you get salary? Did you

3 get commissions? Did you get a mix of salary and

4 commission?

5 A The thing changed every five minutes,

6 so let's see. I think originally my deal was I got

7 like $1500 a month and then 20 percent of revenues

8 generated I guess by my efforts or in coordination

9 with my efforts. At one point I got 40 percent of

10 all commissions generated, but then I think I had

11 to pay like salaries of other people. Then I had

12 like a sliding scale compensation structure where

13 it depended on like the amount of new accounts I

14 opened. And then in going back to the team-based

15 environment, like who was involved in the opening

16 of the account process.

17 Q Got it. So it sounds like originally

18 you had sort of a $1500-a-month salary but then you

19 would get commissions in some amount, is that right?

20 A Yeah.

21 Q So that $1500, was that a draw?

22 A No.

23 Q So you just got that?

24 A Yep.

Page 32

1 Q All right. So when did that arrangement

2 stop and when did it move to a commission-based

3 model?

4 A Well, it's always been a commission5 based model. It was the salary plus commissions.

6 Q When did the salary go away is what I'm

7 asking.

8 A I don't recall.

9 Q How many months approximately of $1500

10 payments did you get, do you think?

11 A I don't recall.

12 Q So after this $1500-a-month arrangement

13 ceased, were there any other salary payments after

14 that or was it just some commission-based metric?

15 A I think, yeah. I mean, as I started

16 opening more accounts, which I can't tell you when

17 this date flipped, I moved to -- I didn't get the

18 guaranteed $1500. I just got commissions. But

19 like the commission percentage changed so often,

20 and I couldn't tell you the exact dates.

21 Q Okay. No, I understand. What I'm

22 trying to ask is -- and I think probably not doing

23 a good job -- is after you stopped getting that 1500

24 a month, was there any more sort of salary after

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 29 - 32

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 10 of 115 PageID #:2057
Page 33

1 that or was everything commission based? And

2 I understand that the basis for the commission

3 changed and the percentage changed. I'm just

4 trying to focus on a salary component.

5 A Right. I mean, I don't -- the reason

6 why I'm like hesitant in answering that is -- not

7 hesitant in like providing an answer. I'm just

8 unsure of the answer because like I think I had

9 some deal worked out where like he paid for like

10 my parking spot. And so I don't know if you

11 consider that salary, but I had like a parking

12 spot paid for. I had -- at one point I think

13 I had like a summer intern and that was paid

14 for, but it was like given to me. I don't know.

15 Somehow it was like salary. So I don't know.

16 Q Got it. So you understand --

17 A I had a weird situation.

18 Q It sounds like it. So you understand

19 what a 1099 is, right?

20 A Yes.

21 Q All right. So what percentage --

22 like, you know, you're getting that 1099 every

23 year. Like what portion of that is going to be

24 salary versus commissions after that sort of $1500

Page 34

1 stops?

2 A I don't know. I don't know off the top

3 of my head.

4 Q All right. So are you familiar with the

5 phrase Time Means Money?

6 A Yes.

7 Q All right. What's the basis for your

8 familiarity? Why is that familiar to you?

9 A At Long Leaf Trading Group that was

10 the name of the -- I don't know if you want to

11 call it program we would solicit.

12 Q And when did that program start, please.

13 A Pretty much when I started.

14 Q Got it. So by the time you started

15 work as an AP in April of 2015, the Time Means

16 Money program was in full swing, is that fair to

17 say?

18 A I guess, yeah. I mean, I wouldn't

19 actually say full swing but it was -- it existed.

20 Q Got it. And is it fair to describe Time

21 Means Money as a broker-assisted trading program for

22 customers of Long Leaf Trading?

23 A Broker-assisted trading program.

24 I mean, that's a very limited view of it, but yeah.

Page 35

1 Q All right. Well, why don't you describe

2 it for me, if you would, please.

3 A It's an option -- they use it as

4 an option selling strategies with defined risk and,

5 yeah, it's done in a broker-assisted environment.

6 Q So what does that mean, please,

7 broker-assisted environment.

8 A It means that the broker assists

9 the clients in, you know, executing trades.

10 Q Got it. So does the broker recommend

11 the trades to the client?

12 A In the situation -- I mean, not

13 under the -- I mean, not under the -- I mean,

14 I don't know. I can speak specifically about this

15 situation.

16 Q That's all I'm asking about.

17 A All right.

18 Q So we're only talking about Time Means

19 Money.

20 A The chief market strategist, which

21 was Tim Evans, would design a trade. It was given

22 to me to then present it to the client and obtain

23 their permission for execution. So I'm just kind

24 of like a lemming in this situation, if you want

Page 36

1 to call it. I don't -- it's not like my trade

2 ideas or I didn't have a choice. It wasn't like

3 I gave -- I didn't provide any feedback, but also

4 it wasn't -- it wouldn't have been accepted if

5 I did anyway so...

6 Q So what percentage of your customers

7 when you were at Long Leaf Trading were Time Means

8 Money customers?

9 A I would say a majority of them,

10 you know. I was -- there was -- I managed --

11 I mean, I had some people that were like given to

12 me that are either self-directed or I think, yeah,

13 that I would like communicate with or be like their

14 point of contact for the firm. But pretty much

15 everything was Time Means Money.

16 Q Do you have any knowledge or understanding

17 of what Long Leaf Trading did before you showed up

18 in terms of broker recommendations? It's a terrible

19 question but, you know --

20 MR. MAY: Because it calls for speculation.

21 MR. BURDEN: It may or may not. I think

22 it's just inartfully worded.

23 Q But, you know, did Time Means Money

24 take the place of something? Were they recommending

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 33 - 36

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 11 of 115 PageID #:2058
Page 37

1 other trades or just doing self-directed, if you

2 know?

3 A Yeah. I mean, from my understanding --

4 and this was just told to me. I didn't see it

5 or anything -- was they had like some trade alert

6 service called In The Money maybe or some other

7 play on those words. And, you know, there was also

8 just, you know, general brokerage accounts and

9 things of that nature.

10 And so I was getting there

11 when there was this move from -- again, I'm not

12 100 percent positive on the title, but I think it

13 was called In The Money trade alerts to Time Means

14 Money. So I'm like that, I don't know, I guess

15 there's that before me. Then I come and they had

16 already made the decision to switch and they had

17 already switched, but I was there I guess in the

18 beginning of it.

19 Q Got it.

20 A I don't know what -- I mean, I guess

21 they send out alerts and they I guess execute

22 maybe -- maybe they're discretionary accounts.

23 But, I mean, I guess I would be speculating.

24 I don't know exactly what they're doing.

Page 38

1 Q Got it. So, Mr. Ruth, did Mr. Evans

2 ever talk to you about or explain why Long Leaf

3 was transitioning from whatever they were doing

4 before to Time Means Money?

5 A I mean, I think like a better trade

6 strategy. Like so better client performance I think

7 was the goal.

8 Q All right. Is that what Mr. Evans said

9 to you?

10 A I don't recall specifically. But

11 if you were to like kind of sum it up, I think that

12 was the idea behind it.

13 Q And that's something that Mr. Evans

14 communicated to you?

15 A Yeah.

16 Q Okay. And how did he communicate that

17 to you?

18 A Verbally.

19 Q Got it. And do you remember when he

20 said that to you?

21 A I mean, this would all be happening

22 probably between the dates of March 13th and

23 April 24th.

24 Q All right. So Mr. Evans communicated

Page 39

1 to you that the transition to the Time Means Money

2 program was for better performance for clients,

3 is that right?

4 A I think -- well, I mean, I guess

5 I could speak on behalf of all brokers. I think

6 all brokers generally want to always improve account

7 performance, and so they're constantly evolving what

8 it is that they're doing in order to -- you know,

9 as results are coming in. So, yeah, I would assume

10 that's what we're -- that's what he's going for.

11 Q All right. Did Mr. Evans say anything

12 else to you about the reasons for the transition

13 to Time Means Money?

14 A Nothing that I recall.

15 Q All right. Do you have an understanding

16 of how Long Leaf's profits were affected by the

17 transition from Time Means Money? Like did Long

18 Leaf make more money or less money, if you know?

19 A I mean, I would assume -- I mean,

20 I really, you know --

21 Q Well, rather than have you assume,

22 let me --

23 A Like do I know for a fact like what the

24 dollar amount change is or --

Page 40

1 Q Did anybody at Long Leaf Trading

2 talk to you about that? Did Mr. Evans ever talk

3 about the firm's revenues sort of pre Time Means

4 Money and post Time Means Money?

5 A I mean, yeah, he indicated that they were

6 making more money.

7 Q And how did he indicate that to you?

8 A Verbally.

9 Q All right. And when?

10 A I mean, throughout my tenure there, yeah.

11 Q So did he say why? Like why was Time

12 Means Money more profitable than what Long Leaf was

13 doing before? Did he tell you?

14 A Well, I mean, we brought in more clients

15 so ...

16 Q Did Mr. Evans ever talk to you about

17 why more clients came in?

18 A Well, we -- I mean, we had more people

19 working there.

20 Q Was there anything about the Time

21 Means Money program that Mr. Evans intimated to

22 you was a better draw for clients?

23 A I think that's -- I don't know. I think

24 I would be speculating on behalf of the client as to

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 37 - 40

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 12 of 115 PageID #:2059
Page 41

1 why they're attracted to the program so ...

2 Q Yeah. What I'm asking you is did

3 Mr. Evans say anything to you? Did Mr. Evans say

4 anything like, oh, clients like this program better

5 because or this is more appealing to clients because

6 or I think this is working well because?

7 A No, I don't think we would talk like that.

8 Q Do you have any knowledge or understanding

9 as to where the idea for Time Means Money came from?

10 A Yeah, what's this guy's name. I don't

11 know. He's some goofball who worked at LaSalle

12 Futures I think. Matt, Matt -- do you know this

13 guy I'm talking about? You probably already know

14 this answer.

15 Q If I did, I couldn't say.

16 A Matt -- I don't know. I could tell you

17 everything about him but his name.

18 Q Yeah. So how did you find out about this

19 guy, how about that?

20 A He -- I think he pitched -- so there's

21 another AP at the firm named James Leeney. He used

22 to work at maybe LaSalle Futures or some subsidiary

23 of it or something. Matt Zeman, that's his name,

24 Matt Zeman.

Page 42

1 Q And how do you spell Zeman, please.

2 A I couldn't tell you. That's not

3 close, I'll tell you that. Matt Zeman I guess

4 introduced -- or I guess Jamie, or James Leeney

5 introduced Matt Zeman to Tim Evans about this

6 program that I think was in some sort of form,

7 like maybe just -- it's called Time Means Money

8 and you do the short options, and I think he

9 actually had a book too as well.

10 Q So how do you know those things?

11 A How do I know those things?

12 Q Yeah.

13 A Just sitting in the office listening

14 to that.

15 Q So you heard somebody talking about it,

16 right?

17 A Yeah.

18 Q Who was talking about it?

19 A Tim Evans.

20 Q Got it. And was Tim Evans talking to

21 you or did you overhear him talking to somebody

22 else?

23 A He would talk to us in a group setting,

24 yeah.

Page 43

1 Q So Mr. Evans explained to you that

2 he got the idea for Time Means Money from Matt

3 Zeman, is that right?

4 A Yeah, that's my understanding.

5 Q Did Mr. Evans ever tell you what

6 appealed to him about this Time Means Money idea?

7 A I think the most appealing thing is it

8 kind of like dictates time, like -- I'm sure you

9 know there's like four trades a month. And so

10 it gives you, you know, from a broker standpoint

11 it gives you the ability to like, you know --

12 like traditional brokerage, like your phone rings

13 incoming and you don't know what's going to happen.

14 And then you get on the phone and the next thing

15 you know, like the whole day's gone by and you

16 might have talked to one person for seven hours.

17 So I think the idea behind it is from like a

18 workflow management perspective, to kind of change

19 that around where we get to control when things are

20 happening in your workday so that you can maximize

21 your efforts. And then also, on the other hand, so

22 the client had, you know, would know what exactly

23 was going to happen that month.

24 I think that's kind of the premise

Page 44

1 behind it is is that people, you know, somebody

2 might say I want a 10 percent return on my money.

3 Well, you're not going to get a 10 percent return

4 unless you put yourself in a position for a

5 10 percent return. And so if you know how many

6 trades you're going to do and you know how much

7 money you're bringing in on the trade and then

8 you hope, you know, how much money is going out,

9 then you can, you know, make a -- create an

10 actual path where the possibility of getting that

11 10 percent can actually happen, whereas if you just

12 do things randomly you might not even put yourself

13 in that position for it to happen.

14 Q Did Mr. Evans ever talk to you

15 about the commission-generating benefits of doing

16 four trades a month as part of the Time Means Money

17 program?

18 A Well, what do you mean by that?

19 Q Well, let's sort of make it simpler.

20 Did Mr. Evans ever talk to you about commission21 related benefits from this Time Means Money program,

22 about how it could potentially generate more

23 revenues for Long Leaf than other models?

24 A No. But, I mean, that wouldn't

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 41 - 44

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 13 of 115 PageID #:2060
Page 45

1 be applicable to me because I never -- I never

2 was in like a traditional brokerage era, so I don't

3 have anything to compare it to.

4 Q I'm just asking you what Mr. Evans told

5 you.

6 A Right. And, no, I mean, the only thing

7 is is like he would preach is is that, you know,

8 you know how much money you're going to make this

9 month because you know how much clients you have

10 and you know how many trades we're doing.

11 Q So Mr. Evans would tell you that with

12 Time Means Money you would know how much money you

13 were going to make this month because you knew how

14 many clients you had and what they were trading?

15 A Well, you knew that they were going to

16 do four trades.

17 Q Got it.

18 A So you have a better idea of knowing

19 than just if you're a traditional broker. It

20 depends I guess on volume and market conditions, you

21 know, the suitability of -- the financial situation

22 of your clients and things of that nature. So it's

23 kind of an unknown where you don't know how much

24 money you would make until the month's over.

Page 46

1 Q So why does Time Means Money sort

2 of provide more stable income for brokers? Like

3 why is that so?

4 A Because you're doing the same amount

5 of trades every month and you know how many clients

6 that you have and so -- and you know how much you

7 charge for a commission. So you know -- you have

8 a better idea of knowing that.

9 Q And with traditional brokerages,

10 you know, did Mr. Evans ever talk to you about what

11 the model is there?

12 A I mean, yeah. I mean --

13 Q What's the model?

14 A You call people and -- there's no

15 rhyme or reason. You try to develop relationships

16 with them and just stay in front of them. And, you

17 know, sometimes you get guys with a couple dollars.

18 Sometimes you get guys with a lot of money and you

19 just -- you're kind of at whatever happens happens,

20 you know. You don't get to control your destiny.

21 Q And so Time Means Money allowed sort

22 of the brokers to control their destiny a little

23 bit better?

24 A I mean, you don't necessarily get to

Page 47

1 control your destiny because at the end of the

2 day they have to, you know, approve the trades and

3 things of that nature. But you could -- you know,

4 if you had to tell your wife next month like, hey,

5 we're going to have probably about $3,000 to work

6 with, then you could probably say that, yeah.

7 Q Got it. And with traditional

8 brokerages your understanding is that it's a bit

9 more catch-as-catch-can, is that fair to say?

10 A I'm not familiar with that term but,

11 I mean --

12 Q Well, then I'll ask a different question,

13 all right?

14 A All right.

15 Q So for traditional brokerages it's more

16 random. Customers would be more idiosyncratic in

17 their trading?

18 A Yeah, that's my understanding, is it's

19 an unknown variable.

20 Q Right. And you got that understanding

21 from Mr. Evans, correct?

22 A Yes.

23 Q All right. So we've been talking about

24 recommendations in the Long Leaf Trading Time Means

Page 48

1 Money program, but we haven't really gotten into

2 any kind of detail. So under the Time Means Money

3 program, Mr. Evans would come up with trade

4 recommendations, right?

5 A Yes.

6 Q And you would pass those along to clients,

7 correct?

8 A Yes.

9 Q And there would be four recommendations

10 every month, correct?

11 A Yes.

12 Q And is it fair to describe these

13 recommendations as recommending out-of-the-money

14 option spreads during your tenure at Long Leaf?

15 A Again, I couldn't tell you if they're

16 out of the money or in the money, but I can tell

17 you that they're all option spreads, except -- I

18 mean, unless you don't consider like a put ratio

19 front spread as a spread, but I would assume you

20 do. So, yeah, they're all spreads.

21 Q All right. So how did you provide these

22 recommendations to your clients?

23 A Verbally over the phone.

24 Q All right. Is there any sort of written

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 45 - 48

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 14 of 115 PageID #:2061
Page 49

1 record generated of the recommendations that you

2 provided?

3 A I didn't provide any recommendations.

4 Q Well, that you communicated, how about

5 that?

6 A Oh, like as the passer guy?

7 Q Yeah. Like did you ever write

8 it down anywhere or did you like send emails to

9 people sometimes?

10 A There's client trading statements.

11 Q Any other written records of the

12 recommendations that you communicated to clients?

13 A I don't know. Some clients, like we'd

14 make like a chart type thing so they could better

15 understand it with like, you know, an image that's

16 very elementary in nature, but that's -- I don't

17 have those items or anything.

18 Q We'll look at them in a little bit.

19 So when you called up clients and communicated

20 Mr. Evans' recommendation to them, how would you

21 do that?

22 A To be honest with you, I don't really --

23 I don't recall specifically how we did it at Long

24 Leaf Trading Group.

Page 50

1 Q Well, how many customers do you think

2 that you serviced at Long Leaf Trading?

3 A Over a hundred.

4 Q All right. So every month how many

5 times do you call each customer? Do you just

6 call them once at the beginning of the month or

7 a few times? What did you do?

8 A It really depended on how the person

9 wanted to be serviced. But, I mean, I would assume

10 I talked to people once or twice a month, yeah.

11 Q All right. So if you're talking to

12 people once or twice a month and you have a hundred

13 clients, you're doing --

14 A I had a hundred clients like --

15 Q Total?

16 A -- not at once, yeah.

17 Q I get it, okay.

18 A Yeah.

19 MR. MAY: During your tenure?

20 THE WITNESS: Yeah, I think.

21 MR. MAY: Is a hundred an estimate?

22 THE WITNESS: Yeah, that's not like

23 a -- yeah, I would --

24

Page 51

1 BY MR. BURDEN:

2 Q So would --

3 A I think at my high point, at one point

4 I was managing 63 clients at one time.

5 Q All right. So I guess what I'm getting

6 at here is it seems like you had a lot of calls with

7 a fair number of clients, and surely you must be

8 able to generalize as to how you delivered this

9 recommendation.

10 A No.

11 Q So it was different for everybody?

12 A I mean, this is years ago. No, it's

13 not that. It's just that how I operate now and

14 how I operated before are -- not separate but it's

15 different and, you know, I've learned things over

16 the years and I've evolved as a broker and things

17 of that nature. So I don't recall. I actually

18 probably don't want to recall how I, you know,

19 how I sounded when I was, you know, fresh in the

20 industry. So I don't -- but the idea, I mean,

21 like to give the general premise is the idea is

22 you tell them, you know, what the trade is. So

23 I would assume you're saying like the strikes and

24 calendar months and the specific commodity and,

Page 52

1 you know, what premium generation and risk and

2 things of that nature but ...

3 Q Got it. So --

4 A I think the most important part is

5 probably getting them to say yes so ...

6 Q So that sort of leads me to my next

7 question. It sounds like when I asked you how

8 you delivered these recommendations, it sounds like

9 the answer is you would call up a client and you

10 would give them the strike prices, right?

11 A Yeah, I would assume so. I mean,

12 I don't necessarily recall, but I would assume

13 that's what we would do, yeah.

14 Q You would tell clients the details of the

15 proposed trade, right?

16 A Yes.

17 Q And those details were communicated to

18 you by Mr. Evans, correct?

19 A Yes.

20 Q And how did he communicate those details

21 of the recommendations to you?

22 A He'd write them on a piece of yellow paper.

23 Q And would he then hand that to you?

24 A Yes.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 49 - 52

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 15 of 115 PageID #:2062
Page 53

1 Q Did he do this for all of the brokers?

2 A There's only a few brokers that actually

3 communicated to the clients.

4 Q Got it. You, Mr. Leeney, who else?

5 A There was a Vince Prieto at one point.

6 There was a -- what's his name, Tony Klancic. And

7 then the only other person who would have talked to

8 a client would have been, what's his name, Chris

9 something. I don't remember his last name.

10 Q All right. So I think you testified

11 earlier that the important thing in talking to

12 clients in describing the trades was getting them

13 to say yes, let's do the trade. Is that fair to

14 say?

15 A Yeah. I mean, in a broker-assisted

16 environment you want to get people to approve the

17 trade, yeah, I would assume.

18 Q Got it. And would clients approve

19 the trade on the phone or would you have them write

20 you an email? How did you obtain the approval?

21 A Almost all the time the way I conducted

22 myself was over the phone. I mean, there might be

23 like some email approvals, but over the phone, yeah.

24 Q Got it. And was there any written record

Page 54

1 that you created of this approval?

2 A Well, I mean, we had like order tickets

3 and things of that nature so ...

4 Q Okay. So other than the order tickets?

5 A Well, if it was in an email, then there

6 would be an email.

7 Q Okay. So other than the order tickets

8 and other than an email they sent, any other written

9 record?

10 A Not that I recall.

11 Q All right. So switching gears to talk

12 about the recommendations, did Mr. Evans ever tel

13 you what the basis of the recommendations were?

14 A I mean, sometimes, yeah.

15 Q Do you recall anything he said about it?

16 A I couldn't tell you.

17 Q What role did the equity in a customer's

18 account play in the trades that are recommended,

19 if any, if you know?

20 A I'm not part of that decisionmaking

21 process so ...

22 Q All right. Did you ever ask Mr. Evans

23 what the basis for his recommendations were?

24 A Like I would assume -- I can't give

Page 55

1 you a specific time that I did. I mean, I don't

2 recall.

3 Q Do you know if it's a thing that you ever

4 did or do you just sort of take the recommendations

5 and go with them?

6 A I mean, yeah. I mean, I didn't have

7 a choice. So it was either -- I mean, it was either

8 do that or leave your job so ...

9 Q Well, did you ever ask Mr. Evans

10 we're doing a crude oil spread this month, why

11 crude oil, why this spread? Did you ever ask Mr. --

12 A I would have -- I can't tell you

13 specifically, but I would assume that I'm a person

14 who's curious about the world. So, yeah, I would --

15 you know, if I wanted to know why we did something,

16 yes, there is a justification for it.

17 Q All right. And would Mr. Evans provide

18 that justification to you?

19 A Probably most of the time, yeah.

20 Q And how did he do that?

21 A Everything's verbally.

22 Q All right. I think you testified

23 before that under the Time Means Money program

24 customers received four recommendations a month,

Page 56

1 correct?

2 A Um-hmm.

3 Q Yes?

4 A Yes.

5 Q There we go. Why is the number four?

6 Why not two, why not eight, if you know?

7 A You've got to ask Tim Evans but ...

8 Q Did you ever ask Mr. Evans?

9 A Yeah. I mean, the answer I got is

10 basically -- I don't know the way to describe

11 it. It's like the point of saturation. Like

12 if you have one trade, you have 100 percent risk.

13 If you have two trades, you have 50 percent, you

14 know, risk. If you have three trades, you have 33.

15 Four, you have 25 percent. When you go to five,

16 the amount of money it costs to finance the fifth

17 trade doesn't -- it overweighs the amount of

18 money -- the amount of percentage that you're

19 decreasing the risk, I guess spreading out risk.

20 So that's his philosophy on that.

21 Q Do you know if that's right?

22 A I don't know. I just do what I'm told.

23 Q So let's talk more about the

24 recommendations, if we could, please. So for

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 53 - 56

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 16 of 115 PageID #:2063
Page 57

1 the options strategies that were recommended

2 by Long Leaf while you were there, did all of the

3 options expire? Were they all left to expire or

4 were some of them offset?

5 A I mean, I don't recall. But, yeah,

6 I would assume that positions were managed within

7 the option period, but I don't recall specifically.

8 Q Yeah. And if you don't recall

9 specifically, that's okay. But do you recall

10 generally were options sort of exited out of on

11 occasions rather than being left to expire?

12 A Yeah. I mean, yeah, I would assume

13 that -- like we managed positions, if you want to

14 call it that, yeah.

15 Q And I sort of -- I want to get to a clear

16 answer on that, if you have the recollection. Did

17 that in fact happen? Were client positions exited

18 out of rather than left to expire on occasion?

19 A Yes.

20 Q All right. Do you recall any specific

21 occasions where that happened?

22 A No.

23 Q Was permission obtained from clients

24 to exit out of those positions once permission --

Page 58

1 well, let me just ask that. Was permission obtained

2 from clients to exit out of those positions?

3 A Anytime that there is a trade being done

4 there's permission from a client.

5 Q Got it. So when it turned out that

6 you had to -- you know, that Long Leaf was going

7 to recommend exiting a trade rather than letting it

8 expire, how did you find that out?

9 A From Tim Evans.

10 Q All right. And how would he communicate

11 that to you?

12 A Verbally.

13 Q And what would you do once you had that

14 information?

15 A Then it's my job to -- if he says we're

16 going to get out of crude oil, like a hypothetical

17 situation, okay, are we booking this for a profit

18 or a loss. He would tell me whatever the answer

19 is and then I would, you know, go tell the client --

20 you know, obviously it depends on the fill price --

21 but I think that we need to obtain your permission

22 to do this. This is what would happen within,

23 you know, a certain dollar amount depending what

24 the market's trading at.

Page 59

1 Q Got it. And was there any written

2 record of the permission that you received from

3 clients to exit positions?

4 A I mean, again, most of it was done

5 verbally. In the event that, you know, I had

6 to reach somebody by email, then yes, there could

7 be a written record. But there's nothing besides

8 a phone call or an email.

9 Q Any other types of written records,

10 maybe records you kept for yourself?

11 A No, I don't recall.

12 Q All right. You mentioned order tickets

13 before. When clients gave you their permission to

14 exit positions, would you fill out order tickets for

15 them?

16 A Yeah, I believe so, yeah.

17 Q All right. And what would you do with

18 those order tickets?

19 A Give them to Tim Evans.

20 Q And so even when clients were exiting

21 positions rather than entering into them, you had

22 to contact those clients and you would fill out

23 order tickets for them, is that correct?

24 A My understanding, yeah. I mean --

Page 60

1 Q Is that what you did?

2 A That's -- I believe that's what

3 we did. I don't know specifically. Like that's

4 how I would do it.

5 Q But is that how you did do it?

6 A I have -- I guess I don't recall then.

7 MR. BURDEN: All right. I'll tell you

8 what, guys. Could we go off the record for

9 five minutes here and then we're going to get

10 into some documents.

11 MR. MAY: Sure. Do you want to take

12 a break?

13 MR. BURDEN: Yes, please.

14 MR. MAY: Okay. Can you make it ten?

15 MR. BURDEN: Absolutely.

16 (Whereupon a recess was taken from

17 10:54 a.m., to 11:20 a.m., after

18 which the following proceedings

19 were had:)

20 MR. BURDEN: Back on the record, please.

21 (Whereupon CFTC Exhibit No. 118 w a s

22 marked for identification, MM.)

23 Q All right. Mr. Ruth, I want to

24 hand you what I've marked as CFTC Exhibit 118.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 57 - 60

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 17 of 115 PageID #:2064
Page 61

1 Do you recognize CFTC Exhibit 118, Mr. Ruth?

2 MR. MAY: Can we have a little bit longer?

3 MR. BURDEN: Of course.

4 Q Mr. Ruth, do you recognize CFTC

5 Exhibit 118?

6 A What do you mean by recognize?

7 Q Well, have you seen it before?

8 A Yeah.

9 Q All right. What is it, please.

10 A These are these, in my previous

11 testimony, the elementary images that I make

12 so that I can understand the trades that Tim Evans

13 designs.

14 Q So CFTC Exhibit 118 is a document

15 that was produced by Long Leaf Trading, and it's

16 an email with some attachments. And it says from

17 jruth@longleaftrading.com and that was your email

18 address at Long Leaf, right?

19 A Yep.

20 Q And you'll see the date on it is

21 September 1st of 2016, is that right?

22 A Correct.

23 Q And there's an address or a To line

24 and it says Broker Team. Who's the broker team,

Page 62

1 please.

2 A I don't recall exactly.

3 Q It's the brokers at Long Leaf, right?

4 A I would assume so.

5 Q All right. So if you look and

6 you'll see the second page of Exhibit 118, we've

7 got a chart here. And who generated this chart?

8 A Me.

9 Q How do you generate it?

10 A I utilized Gain Trader I guess or

11 Long Leaf Trading Xpress, which is the white label

12 of Gain Capital's trading platform, and Microsoft

13 Word.

14 Q All right. So these charts you made

15 using this Gain electronic platform, is that right?

16 A Correct.

17 Q And you generated the charts and you

18 dropped them in a Word document, right?

19 A Yes.

20 Q And then you sent those documents,

21 these charts to the other brokers at Long Leaf,

22 correct?

23 A Yeah, not because I was required

24 to or responsible to. I just, hey, man, I made

Page 63

1 these. Take a look at them.

2 Q All right. So did these trades

3 summarize the recommendations provided by Mr. Evans?

4 A I couldn't tell you that information.

5 Q All right. So let's look, if we could,

6 at the first page of Exhibit 118.

7 A Yep.

8 Q The subject is Forward: Long Leaf

9 Trading Group, September Trade Images. So what does

10 that mean, September trade images?

11 A Oh, we're looking here?

12 Q Yeah.

13 MR. MAY: The subject line.

14 A So in -- executed in August of 2016 were

15 four trades, and these are the images that I made

16 of those trades that expire probably in September.

17 BY MR. BURDEN:

18 Q Got it. So does that help refresh your

19 recollection?

20 A No, because you're asking me

21 is this like a derivative exactly of Tim Evans'

22 trade recommendation, and I don't have Tim Evans'

23 trade recommendation so ...

24 Q Got it. You know, I'm not trying

Page 64

1 to pin you down as to whether it's an accurate

2 representation. I guess I should just ask the

3 question in a more leading way. So, Mr. Ruth,

4 the charts that you've sent to this broker team

5 i n Exhibit 118, these are your attempts to make

6 charts that represent the recommendations for that

7 month --

8 A It's a draft --

9 Q -- is that right?

10 A Yeah, but this is a draft. Like this

11 isn't like -- this is, hey, guys, did I make any

12 mistakes type thing.

13 Q Got it. So let's look at 118. And if we

14 go to the second page, we've got these charts that

15 you put together, right?

16 A Um-hmm.

17 Q Correct?

18 A Yes.

19 Q All right. So if you look on the

20 right-hand side, it says October/November Calendar

21 Swap. Do you see that?

22 A Yep.

23 Q And then it says, "Idea: Crude oil

24 trades at $44 or above through September 15th.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 61 - 64

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 18 of 115 PageID #:2065
Page 65

1 After September 15th crude trades at $44

2 or blow" -- I think that's supposed to be, "or

3 below or above through October 17th with $43 or

4 below at expiration, giving the position max net

5 gain." Did you write that?

6 A That I cannot recall.

7 Q It says out of the money here. Where does

8 that data come from?

9 A From the chart.

10 Q All right. It says in the money. That

11 data comes from the chart as well?

12 A Yep.

13 Q So max net gain, where does that come

14 from?

15 A That would be a calculation of

16 premium collection -- difference in strike prices

17 minus premium collection and fees, commissions,

18 all that stuff.

19 Q Is that a calculation that you performed?

20 A Attempted, yes.

21 Q All right. So total risk $1412.16,

22 what's that, please.

23 A I mean, I don't know the specific

24 numbers here. But I think the idea behind that

Page 66

1 would be in the event that you lost the trade, that

2 would be the amount of money that you would lose

3 on that specific trade per contract.

4 Q All right. And how is that calculated?

5 A By the total. It would be the spread,

6 plus commissions, fees and all that jazz.

7 Q And is that a calculation that you

8 performed?

9 A Attempted, yeah. Again, this is a --

10 these are all drafts.

11 Q Got it. And so Exhibit 118, did you

12 send charts of this nature to your fellow brokers

13 substantially every month during your entire tenure

14 at Long Leaf?

15 A I mean, I don't recall if I did it

16 regularly but, you know, I would take it upon

17 myself to make these for my own personal knowledge

18 so when I'm communicating with clients, I can talk

19 more educated about what is the trade that they

20 have in their account and so I knew like specific

21 expiration dates and stuff of that nature. But

22 I don't know if I was regular about it or not.

23 I don't recall.

24 Q And you sent these charts when you

Page 67

1 made them to the other brokers to help them, right?

2 A Yeah. I mean, more of like, hey,

3 I spent time doing this. Why should you spend

4 time doing it.

5 Q And the charts that we see in Exhibit 118,

6 did you send those to clients?

7 A I think sometimes I did but not like

8 regularly and not to everybody but ...

9 Q So, yeah. So I was going to show you

10 one but maybe -- you know what, I won't. You know

11 what, sorry. Let's stay on 118.

12 A Like the purpose of me sending it to a

13 client is like it's really the red light, green

14 light, yellow light system like.

15 Q What does that mean?

16 A Like in the green, this is where you

17 want the price action to be in order for -- you

18 know, if it were to expire worthless, then you would

19 get the full amount of premium that you collected.

20 The yellow, you know, it can go either way. There's

21 a breakeven point and it's a prorated amount

22 of either the total risk or the total net premium

23 collection. And the red is obviously, you know,

24 it's a total loss. So the purpose of it is to --

Page 68

1 it's an elementary image to --

2 Q To what?

3 A To just -- so, you know, a client

4 could have a -- I don't know if you guys have --

5 well, I'm sure you have. But if you look at

6 an account statement, it's very difficult to

7 understand, and I think this helps illustrate

8 physically what is going on with your position.

9 (Whereupon CFTC Exhibit No. 119 w a s

10 marked for identification, MM.)

11 Q Mr. Ruth, I want to hand you what I've

12 marked as CFTC Exhibit 119, and I'm going to ask

13 you if you recognize this document and if you can

14 tell me what it is. But why don't you take a look,

15 if you would, please, and then indicate to me when

16 you have looked to your satisfaction.

17 A Yeah, I'm ready to proceed.

18 Q All right. Do you recognize Exhibit 119?

19 A No.

20 Q All right. So if you look at the top,

21 it says jruth@longleaftrading. Is that your email

22 address?

23 A That is my email address.

24 Q Or it was when you were at Long Leaf

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 65 - 68

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 19 of 115 PageID #:2066
Page 69

1 anyway?

2 A Yep.

3 Q All right. You'll see it's dated 8/2/17.

4 In the To line --

5 A No clue what that email address is.

6 Q There we go.

7 MR. MAY: Wait until he asks a question.

8 THE WITNESS: All right.

9 MR. MAY: You can't answer it until he

10 asks.

11 BY MR. BURDEN:

12 Q All right. So the subject is

13 Long Leaf Trading Group Strategy Explanations

14 of August Positions.

15 A I would never write that.

16 Q So do you think that somebody else wrote

17 this email?

18 A I have no clue but ...

19 Q All right. Well, let's put it

20 aside then and let me follow up on your testimony.

21 I think you testified that you sent charts similar

22 to the ones in Exhibit 118 to customers, is that

23 correct?

24 A Yeah. I mean, after -- I mean,

Page 70

1 I don't send anything to customers unless I have

2 the permission of the compliance officer, which

3 is Tim Evans. So I'd send it like, you know, hey,

4 look at this, is this okay, yeah. And then if it's

5 okay, then I would send it to -- again, I don't

6 think I sent it to everybody, or maybe I did for

7 like a month or two. I don't know. But there's

8 some, yes, that I sent it to so they could, you

9 know, their visual ...

10 Q Yeah, so that's my question. Why did

11 you sometimes send these charts you generated to

12 customers?

13 A I mean, in a broker-assisted environment

14 you've got people who like they want to talk to you

15 a lot, and then there's some people who don't want

16 to talk to you at all or, you know, just the bare

17 minimum requirements. And some of the guys that

18 want to talk to me a lot, this helps like them

19 understand what's going on and stuff but ...

20 Q Got it. So the charts that you

21 generate you send to some customers if you think

22 it will be useful for them to see or if they would

23 like it, is that right?

24 A Yeah.

Page 71

1 Q All right. And --

2 A If they ask me for it or -- yeah.

3 Q But you didn't send those charts to

4 customers as a general practice?

5 A I don't recall specifically but

6 I might have like when I first started, I thought

7 maybe this is a good idea or I don't know. So I

8 don't think I -- I don't think like if you were to

9 take my entire client list that I had and looked at

10 every single month, did I send it to every single

11 customer religiously, I would say that that's

12 probably not the case.

13 Q Got it. So let's switch gears a

14 little bit. I want to talk about how customers

15 did at Long Leaf Trading and specifically with Time

16 Means Money. How did customers do with Time Means

17 Money?

18 A I don't recall.

19 Q You don't recall. Did your customers

20 make money?

21 A I don't know. I mean, it depends

22 on like --

23 MR. MAY: I guess is the question

24 really net of their trading experience or

Page 72

1 on a month-to-month basis, on a daily basis?

2 MR. BURDEN: What do you mean net of

3 their --

4 MR. MAY: The amount of money that

5 they put into the account versus the amount

6 of money that they left in the account.

7 MR. BURDEN: Yeah, I'll tell you what.

8 We'll see what we can do here and what Mr. Ruth

9 recalls and understands.

10 Q So, Mr. Ruth, how many of your customers

11 made money trading?

12 A I don't recall.

13 Q Can you think of anyone who did?

14 A I don't recall.

15 Q Is it fair to say that substantially all

16 of your customers lost money trading?

17 A I don't recall.

18 Q All right. Is it fair to say that that's

19 true for all of Long Leaf Trading's customers?

20 A I don't recall.

21 Q Did you ever talk to anybody about

22 Long Leaf Trading, any of the other brokers, about

23 customer profits or losses?

24 MR. MAY: I'm sorry. Could you repeat --

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 69 - 72

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 20 of 115 PageID #:2067
Page 73

1 could you read back the question?

2 (Whereupon the portion of the record

3 was read as requested.)

4 A I don't recall specifically.

5 But, I mean, if you have clients calling in

6 and -- I don't know if I'm allowed to say the

7 word bitching, but bitching at you or whatever --

8 BY MR. BURDEN:

9 Q You can say whatever you want to.

10 A I would assume that like -- that I'm

11 like, hey, Jamie, can you believe this, this guy

12 said da, da, da, da, da, da, da, da. My life's so

13 hard, you know, like that kind of talk? Yeah,

14 I guess that falls under your conversation.

15 Q All right. So --

16 A Do I recall anything specifically, no.

17 Q Yeah, and I want to be clear. I'm not

18 asking necessarily about specifics here, and I don't

19 mean to revisit questions I've already asked. But

20 as a general matter, did your customers make or lose

21 money at Long Leaf Trading?

22 A Well, I mean, this is like always

23 a tough question to ask because if you're asking

24 like -- you've got to understand like the way

Page 74

1 that Time Means Money is set up is you live month

2 to month. So you judge what happened this month

3 and then, you know, that's what you're going with.

4 And so that's how the clients look at it. That's

5 how you look at it. So you can have good months

6 and you can have bad months. You can have great

7 months. You can have terrible months. And when

8 you -- you know, the results are the results. So

9 you tell them the results and if it's a good month,

10 well, yeah, technically you're making money.

11 Now, overall like what happens

12 at the end, I mean, I would assume, just like all

13 commodity accounts, they lose money. But you don't

14 know that. Like it's not like, you know, you're

15 sitting there and saying like, oh, we know the end

16 result is going to be they lose money and we make

17 money. Like that's not how it is. It's you're

18 judging on a month-to-month basis. So they could

19 go make money one month and lose money another

20 month and you're just constantly evolving to try

21 to do whatever you can to make account performance

22 positive.

23 Q Got it. So during your tenure at

24 Long Leaf, is it fair to say that substantially

Page 75

1 all of your customers had less money in their

2 accounts at the end of their trading than when

3 they started?

4 A I mean, I don't recall the specific

5 like equity balances of my clients from, I don't

6 know, what is this, two, three years ago? But I

7 don't know. I'm sure you probably know the answer

8 so ...

9 Q What's your answer?

10 A I don't have one really. I don't recall

11 the specific ...

12 Q Do you recall the names of any of your

13 customers who made money?

14 A Again --

15 MR. MAY: Could we define make money again?

16 A Yeah, this is like -- you guys look

17 at making money and the way I look at making money

18 different.

19 BY MR. BURDEN:

20 Q Yeah. Who had more trade equity

21 in their accounts by the end of their trading or

22 by the end of your tenure than they did when they

23 started?

24 A I mean, the last month I was there

Page 76

1 I signed up five people. I don't know how their

2 results were so I can't -- I mean, there could

3 be a situation there.

4 Q What do you mean by that?

5 A Well, they could have made

6 money. And so by the end of my tenure they

7 could certainly have more money than what they

8 started with, I guess.

9 Q Was that the case for any customer whose

10 name you can recall?

11 A No, I can't.

12 Q All right. I think your testimony

13 before was, you know, essentially that you can't

14 really say if a customer is making or losing money

15 because trades are recommended monthly and monthly

16 they may make money or they may lose money. Is that

17 sort of a fair summary of your testimony?

18 A No.

19 Q All right. Do it better for me, if you

20 would, please.

21 A I think you're -- where you're taking

22 a snapshot of the end result of like the account

23 value.

24 Q Got it.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 73 - 76

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 21 of 115 PageID #:2068
Page 77

1 A And I'm saying along the way they

2 could have been making money at some point or that

3 specific month the result, net result of those four

4 trades is they had a positive impact in their

5 account from a net liquidating standpoint.

6 Q So --

7 A So in my opinion, I would say that at

8 points they made money.

9 Q Got it. What months were Long Leaf's

10 trading recommendations profitable for customers?

11 A I couldn't tell you. I don't recall.

12 Q Do you recall whether there were more

13 profitable or unprofitable months for customers

14 during your tenure at Long Leaf?

15 A Don't recall.

16 Q All right. You received statements

17 from Gain Capital, correct?

18 A Yes.

19 Q And you received those statements every

20 day, correct?

21 A No.

22 Q Well, every weekday?

23 A No.

24 Q How frequently did you receive statements

Page 78

1 from --

2 A Anytime that the market is open.

3 Q -- Gain Capital? All right. Did you

4 review these statements?

5 A Yes.

6 Q All right. How frequently did you review

7 them, please.

8 A Every day the market was open.

9 Q All right. So every time you got

10 a statement from Gain you reviewed it, correct?

11 A It was my responsibility to review

12 it, yes, check for accuracy of the official record

13 of the account.

14 Q Got it. Were they in fact accurate?

15 A There is times when they're not.

16 Q When were they not accurate? Can you

17 recall --

18 A No.

19 Q -- any specific instances?

20 A No.

21 Q What did you do when you found the

22 statements were inaccurate?

23 A I immediately notify the compliance --

24 Q And that's Mr. Evans, correct?

Page 79

1 A Yes.

2 Q How many occasions did that happen on?

3 A I don't know. Numerous times.

4 Q Do you think more than five?

5 A I don't recall specifically, but I would --

6 I don't know. Yeah, sure.

7 Q Okay. Well, you know, if you don't know,

8 that's okay.

9 A I don't know the specifics but, yeah,

10 it's --

11 MR. MAY: Are you estimating or are you

12 guessing? Are you speculating?

13 A Yes, yes, I am estimating, guessing

14 and speculating. I don't know for sure, but it

15 happened more than once.

16 BY MR. BURDEN:

17 Q And when you felt like the statements

18 were inaccurate, you advised Mr. Evans of this,

19 correct?

20 A Yes.

21 Q And how did you advise Mr. Evans of this?

22 A I would either call him, text him or

23 email him.

24 MR. PATRICK: What were the nature

Page 80

1 of the inaccuracies that you can recall about

2 the Gain statements when you received them?

3 A Most of it had to do with like

4 allocations, you know. I don't think block order

5 is the correct way to describe the way that we --

6 that Tim Evans actually executed the trades. I

7 think that means something different. But, you

8 know, it's -- if one of my clients was supposed

9 to get like three of the specific, you know, trades

10 in the account, maybe there was one or four or five

11 or something like that. The other thing is he did

12 like this commission credit system on I think if

13 there was a four-legged strategy, maybe they got

14 some sort of commission discount. And that, I mean,

15 those were not entered properly sometimes. So --

16 and then I think in like the allocation, like let's

17 say I had a client who had told me, hey, I'm done

18 trading or something of that nature and I would

19 tell him, you know, I never turned in permission

20 for it to be traded. Well, sometimes there would

21 be a situation where like that account was traded

22 and those trades were entered in. So I'd have to

23 tell him about it then. I think those would be

24 like moved to like errors or omissions or something

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 77 - 80

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 22 of 115 PageID #:2069
Page 81

1 of that nature, but --

2 BY MR. BURDEN:

3 Q Sorry, keep going.

4 A It's never -- I don't think it's ever

5 like the wrong strike price or anything like that.

6 I think it's more of just the allocation system

7 breakdown.

8 Q All right. So did you feel that you

9 understood the statements you received from Gain?

10 A Over time, yeah. I mean, I wouldn't

11 say like, you know, when I had my first client

12 I understood it. But, I mean, I could tell you

13 right now that I could -- I'm very well versed in

14 a statement right now, yeah.

15 Q All right. So --

16 A But I've also -- you know, in my

17 time at Long Leaf I was -- you know, I'd only

18 been in the industry for, I don't know, a couple

19 years so ...

20 Q So when at Long Leaf do you think you

21 first began to understand the Gain statements?

22 A I couldn't tell you like a date.

23 Q Was it early on or did it take some time?

24 A Probably took some time, yeah.

Page 82

1 Q All right. Did you ever ask for help

2 in understanding the Gain statements?

3 A Yeah.

4 Q Who did you ask for help from?

5 A Tim Evans.

6 Q All right. Did he give it to you?

7 A I don't recall specifically, but I would

8 assume so.

9 Q Well, do you remember if he did or not?

10 A Yeah, I mean, he would help me out, yeah.

11 Q Would Mr. Evans explain the statements

12 to you?

13 A Yeah, he would try, yes.

14 Q All right. And was that effective?

15 Did you understand the statements when Mr. Evans

16 explained them?

17 A I mean, not in its entirety but that

18 specific issue at the time, yes.

19 Q All right. Did you ask anybody

20 else for help understanding the Gain statements?

21 A There would be times where I would

22 call like maybe the Gain trade desk and ask them

23 questions about it as well.

24

Page 83

1 (Whereupon CFTC Exhibit No. 120 w a s

2 marked for identification, MM.)

3 Q Mr. Ruth, I want to hand you what

4 I've marked as CFTC Exhibit 120, and I'm going

5 to ask you if you recognize this document and if

6 you can tell me what it is. And please indicate me

7 when you've reviewed it to your satisfaction.

8 MR. MAY: I'm still looking at it.

9 THE WITNESS: It's going to take you

10 a year.

11 MR. MAY: This document isn't sequentially

12 Bates stamped.

13 MR. BURDEN: Yeah, that's correct.

14 MR. MAY: Okay. So I really can't

15 say for the record how many pages it is, but

16 it looks to be at least like a hundred.

17 MR. BURDEN: Do you consider that that's

18 required?

19 MR. MAY: Do I consider it to be required?

20 MR. BURDEN: Yeah.

21 MR. MAY: It would be customary.

22 MR. BURDEN: All right. Well, we're not

23 going to do that today.

24 Q All right. Mr. Ruth --

Page 84

1 MR. MAY: I'm not done.

2 MR. BURDEN: Oh, by all means. Have at it.

3 MR. MAY: All right.

4 MR. BURDEN: Mr. May?

5 MR. MAY: Go ahead.

6 BY MR. BURDEN:

7 Q All right. Mr. Ruth, do you recognize

8 C F T C Exhibit 120?

9 A I believe it appears to be my equity run

10 for 8/31/2016.

11 Q So you'll see the subject of this

12 email is Daily Client Statement. Do you see that?

13 A Correct.

14 Q All right. So what's a daily client

15 statement for the record, please.

16 A Daily client statement is -- over LLT010

17 it encompasses the account statements for everybody

18 under that sales code.

19 Q And whose sales code is that, please.

20 A That's one of my sales codes. And

21 then it also encompasses -- I don't know what they

22 call this but -- I don't have a page number either.

23 But starting here, this is like a different -- it's

24 not a daily client statement.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 81 - 84

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 23 of 115 PageID #:2070
Page 85

1 Q So let me stop you there because

2 that's exactly the part I'd like to talk about.

3 A Okay.

4 Q And as your counsel pointed out,

5 Exhibit 120 is not sequentially number, nor are

6 any of the documents produced by Long Leaf Trading.

7 If you flip to where the pages of Exhibit 120 o r i e n t

8 horizontally --

9 A Yeah.

10 Q -- i.e., in a landscape format,

11 the title at the top is Account Sequence Status

12 Report. Do you see that?

13 A Um-hmm.

14 Q Yes?

15 A Yep.

16 Q All right. So what does this account

17 sequence status report show, please.

18 A Well, there's a lot of things that you

19 can get from it.

20 Q All right. Does the account sequence

21 status report show the profit and loss of each

22 customer account?

23 A I would say not clearly.

24 Q All right. Why do you say that?

Page 86

1 A Like I wouldn't look under the

2 subject and say profit and loss and be like you

3 lost $20,000.

4 Q Yeah, so we're looking at the same thing

5 here. So let's take a look at --

6 A That's not -- yeah, that's not accurate.

7 Q -- the first page of the account

8 sequence status report for CFTC Exhibit 120, and

9 you'll see there is a part that says profit and

10 loss. Do you see that?

11 A Um-hmm.

12 Q Yes?

13 A Correct.

14 Q All right. And you'll see on the

15 left-hand side it says MTD amounts, YTD amounts and

16 LTD amounts. Do you know what those words mean?

17 A Yes.

18 Q What does that mean, please.

19 A Month to date, year to date, lifetime

20 to date.

21 Q All right. So for profit and loss,

22 is that showing us the month-to-date, year-to-date

23 and life-to-date profit or loss of the account?

24 A No.

Page 87

1 Q Why not?

2 A Because I don't -- I don't know

3 who -- how that's calculated. I didn't produce

4 that report.

5 Q All right.

6 A I don't know if that encompasses

7 commissions. I don't know how that's calculated.

8 So, no, I'm going to say no.

9 Q Okay. But is your answer no or is it

10 that you don't know?

11 A Well, I don't know and my answer is no.

12 Q All right. Why do you -- I mean,

13 it says profit and loss. It says month to date,

14 year to date and life to date. And you received

15 this statement every day that the market was open,

16 correct?

17 A Right, but that client has an open

18 position. So month to date how come there's no

19 profit and loss?

20 Q Yeah, I don't know. But my question

21 to you is why does this not reflect month-to-date,

22 year-to-date and life-to-date profits or losses for

23 this account?

24 A These are short option strategies.

Page 88

1 So I would assume that that -- those numbers are

2 not correct.

3 Q But why do you think that?

4 A Because your statement that you guys

5 require doesn't reflect a short option strategy

6 properly.

7 Q So what component of let's just

8 say profitability or value do you believe is not

9 reflected in this profit and loss calculation we see

10 i n Exhibit 120?

11 A Can you repeat the question?

12 Q Yeah. So your testimony is that

13 we're looking at a -- it says profit and loss life

14 to date 20,169.53. Do you see that?

15 A Correct.

16 Q And do you see a DR next to it?

17 A Correct.

18 Q Do you know what DR means?

19 A Debit.

20 Q All right. So why does this not

21 reflect a $20,000 loss for the life of this

22 account?

23 A I think the better question is why does it.

24 Q Well, I'm not testifying. You're

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 85 - 88

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 24 of 115 PageID #:2071
Page 89

1 testifying.

2 A Well, how do you -- well, I mean, you're

3 representing that it is.

4 Q No, no, no, I'm not representing that it

5 is. I'm asking you if that is what it represents

6 and you're --

7 A All right. Well, if you find out

8 if it is, then I'll testify whether or not it is

9 or isn't.

10 Q All right. It sounds like your

11 testimony, though, is that this $20,000 does not

12 reflect life-to-date losses for this account,

13 correct?

14 A You don't even know if it does. So when

15 you figure it out, I'll testify.

16 Q Is there some component of this, some

17 component of value --

18 A To who?

19 Q -- to this account that is not reflected

20 in this 20,000 --

21 A Value to who? A person needs value.

22 A value to me? A value to the client? The client

23 doesn't get this. This is to me.

24 Q What I'm asking you is why do you think

Page 90

1 this does not represent --

2 A Because most statements that are

3 produced do not reflect the actual value of the

4 account.

5 Q Okay. So what would go into the actual

6 value of the account?

7 A How would I calculate profit and loss?

8 Q Yes.

9 A I would -- in this situation I would

10 probably use an equation of closed positions, the

11 P&L of closed positions, and I would do that on a

12 net basis, including fees, brokerage commissions.

13 Q Got it.

14 A And, yeah. I guess, I don't know,

15 platform fees, something like that. I don't know

16 how that's calculated, so I can't tell you whether

17 or not it's an accurate representation of the profit

18 and loss of the account.

19 Q Got it. So this profit and --

20 A I have reason to believe it's not,

21 considering that it's zero in MTD and there's open

22 positions in Shane Allen's account at the time.

23 Q All right. So where could we look

24 in these daily statements that you received to show

Page 91

1 us the P&L of an account over its life?

2 MR. MAY: I'm sorry. Could you repeat the

3 question, please.

4 (Whereupon the portion of the record

5 was read as requested.)

6 A I don't want to like sound combative

7 here, but aren't you the CFTC? Shouldn't you --

8 like you're the one who designs this whole system.

9 So --

10 Q Well, I don't -- sorry, go ahead.

11 A Wouldn't you guys understand -- like

12 wouldn't you know where that is?

13 Q But I can't testify, right? So

14 I have to ask you during this proceeding what you

15 know and understand. So if I know it --

16 A All right. Well, I refer --

17 Q -- I couldn't say.

18 A I refer to the Commission to figure

19 out where they put the performance of the account.

20 Q Do you know where we can find it here?

21 A I mean, I think that if you were to

22 take, you know, a document and look at it and

23 there's a subtitle heading that says profit and

24 loss, I think one would assume that that might

Page 92

1 be the answer. However, you don't know what is

2 used in that calculation. So I wouldn't be able

3 to say with any certainty that that is the actual

4 profit and loss of the account.

5 Q So when you received these daily

6 statements, would you look and see what the P&L

7 of an account was, you know, see how your clients

8 are doing?

9 A No.

10 Q Why not?

11 A Because that's not part of my review.

12 My review stops before I get to this (indicating).

13 That's not part of my responsibilities. My

14 responsibilities is check for the accuracy of the

15 statement.

16 Q Got it. But that does not include the

17 accuracy of P&L for the account?

18 A I can't -- you can't compute it.

19 I can't compute it. The statement can't compute

20 it. So no one would make that a responsibility of

21 anybody.

22 Q All right. So your testimony is that

23 you received these daily statements from Gain?

24 A Um-hmm.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 89 - 92

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 25 of 115 PageID #:2072
Page 93

1 Q And you did review them, correct?

2 A The purpose of my review is to check for

3 the accuracy of like the positions in the account.

4 Q Got it. So you didn't -- did you keep

5 track of your clients' profit and losses over the

6 course of their trading?

7 A Not that I -- no, not that I recall.

8 Q Okay. You can put 120 aside, if you want.

9 A (Witness complies).

10 EXAMINATION

11 BY MR. PATRICK:

12 Q Before we do that, I think you

13 testified earlier that you became over time

14 pretty adept at reading the Gain statements, is

15 that right?

16 A Correct.

17 Q And since leaving Long Leaf Trading you've

18 worked at other brokerages?

19 A Correct.

20 Q And was it your responsibility

21 in your role at those other brokers to review the

22 statements, similar to how you reviewed them at Long

23 Leaf Trading, to identify whether the positions were

24 accurate, that sort of thing?

Page 94

1 A I think it was the responsibility of

2 all brokers, yes.

3 Q Okay. Do you understand the profit

4 and loss in a brokerage account statement to

5 include --

6 A It's not an account statement, though.

7 Q Okay. Do you understand the profit and

8 loss --

9 A Sorry for cutting you off, yeah.

10 Q Okay. When you review a Gain customer

11 statement, at the end of the customer statement is

12 there a recap section that includes customer profit

13 and loss?

14 A No.

15 Q So --

16 A On the Gain statement there's

17 an account summary section. There's a net

18 liquidating value would be the closest thing, but

19 that is not a reflection of profit and loss of the

20 account.

21 Q Okay. So if we look at the second

22 page -- make it the third page of Exhibit 120,

23 do you see that? And this would be --

24 MR. MAY: Are we talking --

Page 95

1 A Shane Allen?

2 BY MR. PATRICK:

3 Q Shane Allen, correct.

4 A Consolidated financial statement?

5 Q Correct.

6 A Yes. There's no P&L line item on there.

7 Q Okay. So at the very end of the

8 statement where you see the account summary as

9 of 30 August 2016, do you see that?

10 A Yep.

11 Q Okay. And in that recap section

12 there's -- I think it's the third row down --

13 there's a section called realized profit and loss.

14 Do you see that?

15 A Yes.

16 Q Okay. Do you understand what that means,

17 realized profit and loss?

18 A Yes.

19 Q What does it mean?

20 A It means on that specific day a trade

21 was closed, and it has a specific debit or credit

22 value to that actual trade.

23 Q Okay. And do you know if --

24 A It has to be a closed trade from that

Page 96

1 specific day in that situation.

2 Q I understand. So would Gain include

3 the gain or loss on an open position in that section

4 called realized profit and loss?

5 A No, because it wouldn't meet the definition

6 of realized profit or loss.

7 Q Okay. So is your understanding

8 of the term profit and loss, does that also include

9 unrealized profit and loss or does that only include

10 positions that have been offset and are now closed?

11 A It's not a black or white situation.

12 It would be depending on what information you're

13 trying to obtain from me. So if you're a customer

14 and you say where is my account now, well, what

15 are you looking for? Are you looking for --

16 you know, I would have to clarify.

17 Q I understand.

18 A So it's not --

19 Q I'm only asking in the context of

20 what you understand the Gain Capital statements to

21 say. So is it your understanding that Gain Capital

22 when it reports profit and losses on its account

23 statements, that it includes profit and losses

24 on open positions and closed positions?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 93 - 96

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 26 of 115 PageID #:2073
Page 97

1 A Well, net liquidating value by

2 definition is if we were to liquidate all the

3 positions in your account at the time that this

4 statement was printed at the prices reported to,

5 you know, the settle price on this statement, that

6 would be the value of your account. That is not the

7 profit and loss of your account.

8 Q Understood. And I'm not asking about --

9 A So nowhere, nowhere on this statement

10 does it give the profit and loss of the account.

11 Q I'm only asking what you understand

12 Gain includes in that line called profit and loss.

13 MR. MAY: You mean the one that says

14 realized profit and loss?

15 MR. PATRICK: Correct.

16 MR. MAY: Okay.

17 A I think we've already answered that,

18 though. I've said the realized profit and loss

19 can only happen on the day that there's a realized

20 profit and loss.

21 BY MR. PATRICK:

22 Q So that does not include trades

23 that are open as of the date of the statement?

24 A Correct. I mean, I would assume that

Page 98

1 because of the fact that it says 0.00.

2 Q Okay.

3 A Yeah. So there's -- in summation,

4 there's no way for me to look at this statement

5 and say here's the profit and loss of your account

6 on a specific day.

7 Q Okay. So do you think that the

8 Gain statements are not including premium that's

9 captured in a credit spread strategy as part of

10 the profit and loss in the profit and loss statement

11 and that's the reason why you can't calculate where

12 a customer's account is at?

13 MR. MAY: That was a really long

14 statement. Could you read it back to the

15 witness?

16 (Whereupon the portion of the record

17 was read as requested.)

18 A I can't calculate where a customer's

19 account is at because the statement doesn't provide

20 that information on a daily basis.

21 BY MR. PATRICK:

22 Q And I'm just trying to get at what

23 it is --

24 A Here, I'll give you an example.

Page 99

1 I bet you if I were to take one of these spreads

2 and I were to actually do the math, I would say

3 that one of these spreads is probably going to

4 tell me that I'm losing -- I'm just going to throw

5 an arguable number out here -- let's say $3,000 on

6 this statement. But if you go back to the actual

7 strategy and you look at the risk of the strategy,

8 you can't physically lose $3,000 on that strategy.

9 And so if you were to go to the net liquidating

10 value, it's going to have a negative draw of $3,000

11 but the strategy can only lose let's just say like

12 1200 bucks. So there's 28 -- or $1800 there of

13 money that it's saying that you don't have at your

14 net liquidating value that you really do have.

15 And so, yes, the statement that you guys have

16 designed, I think it doesn't give an accurate

17 reflection of the profit or loss of the account

18 at any given point. It's not black and white.

19 FURTHER EXAMINATION

20 BY MR. BURDEN:

21 Q So forgive me for asking this question

22 I think possibly again, but how did you track your

23 customers' progress over time?

24 A It's their responsibility.

Page 100

1 Q And I don't want to dispute that

2 or be seen to argue with you, but did you track

3 it yourself?

4 A I mean, it depends. Like some people

5 I would do it for or try to get close or something

6 of that nature, but I don't like recall specifically

7 who or what or how long I did it for or anything of

8 that -- there's no like regular procedure. But,

9 yeah, if there's -- I mean, yeah. That's all I got.

10 Q Well, I want to push back on that

11 a little bit. It seems surprising to me that you

12 wouldn't have had any idea how your customers were

13 doing profitwise. Was that the case?

14 A I think you don't understand. I'm

15 a lemming in this whole entire process, right?

16 I show up to work. I do what I'm told. I'm new

17 in the industry. My mentor is Tim Evans, you know.

18 I've only heard from one person at this point in

19 my career as to what is right and what is wrong,

20 and I'm just trying to absorb as much information

21 as possible and be successful in life from a

22 professional standpoint and that's it.

23 Now, if you were to talk to

24 Jeremy in 2019 and how he conducts himself, yeah,

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 97 - 100

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 27 of 115 PageID #:2074
Page 101

1 like I agree. I think it's ridiculous too that

2 I didn't know. But I, you know, have learned

3 many things over the years and I've gotten, you

4 know, mentors with different perspectives and I'm

5 constantly trying to absorb new information to

6 be a better broker and understand my industry and

7 finance in general and compliance and regulations.

8 And, you know, I would volunteer to help you guys

9 design a statement that actually makes sense for

10 clients. But, yeah, it's -- I mean, I went from

11 being, you know, internet marketing to a broker

12 in a short period of time and you're asking me

13 about, you know, then. And I didn't have much

14 knowledge and I only had one person teaching me

15 the ropes.

16 Q So you worked at Long Leaf Trading for

17 two years and change, is that right?

18 A I believe so, yeah.

19 Q So is it your testimony that during

20 that period you didn't know whether your customers

21 were making or losing money from month to month?

22 A I don't recall what happened two years

23 ago with customers, you know, when I'm with specific

24 customers.

Page 102

1 Q Well, I'm not asking about

2 specific customers. I mean, for the Time Means

3 Money program, right, substantially all of those

4 customers get the same four trade recommendations

5 every month, is that right?

6 A Essentially, yeah.

7 Q Yeah. So did you keep track of how

8 those recommendations were doing, whether they were

9 making money or losing money on a month-to-month

10 basis?

11 A It's all right here.

12 Q And you're indicating that it's all in

13 Exhibit 120, correct?

14 A No. I'm indicating that the record

15 of what happened to these people's accounts comes

16 through the account statements. If you're asking

17 me like did I keep track of something outside of it,

18 not that I recall.

19 Q Okay.

20 A The official record of the account is

21 their account statement. That's what happened.

22 You guys have access to them. I see you have a

23 whole box of them, so I'm sure you guys know what's

24 going on.

Page 103

1 Q Well, it just sounds like your

2 testimony is that you worked at Long Leaf Trading

3 for two years and you had no idea whether your

4 customers were making or losing money. That's

5 what it sounds like your testimony is to me. Is

6 that what you mean to say? Is that right?

7 MR. MAY: I think --

8 A No.

9 MR. MAY: -- we're asking the same

10 question kind of over and over again until

11 we get an answer that we like the best, which

12 is really not permissible.

13 MR. BURDEN: Mr. May, I think what

14 we're trying to do is get an actual answer.

15 MR. MAY: I think you have an actual

16 answer. It just doesn't suit your purpose.

17 MR. BURDEN: You don't know what my

18 purpose is, do you?

19 MR. MAY: I have an idea.

20 MR. BURDEN: Would you read the question

21 back, please.

22 (Whereupon the portion of the record

23 was read as requested.)

24 A I mean, I don't think I testified to

Page 104

1 that. That doesn't accurately reflect what I've

2 said. All I'm saying is is that you have a record

3 of what happened. You have a box of it over there.

4 Like I don't understand my opinion of it. I don't

5 know what -- how that matters. I mean, these

6 things don't lie. These are the results, right?

7 Q Well, Mr. Ruth, the entire purpose

8 of you being here is to give us your opinions

9 and to tell us what you remember, what you said

10 or what people said to you.

11 A Well, I mean, I don't know. I can't

12 say this enough but in a different way. I don't

13 remember the specific results of any of the accounts

14 that I had to deal with.

15 (Whereupon CFTC Exhibit No. 121 w a s

16 marked for identification, MM.)

17 Q All right. Mr. Ruth, I want to

18 hand you what I've marked as CFTC Exhibit 121.

19 And take a look at it, if you would for me, please,

20 and indicate to me when you've reviewed it to your

21 satisfaction.

22 MR. MAY: Actually, these ones and

23 all the ones except CFTC Exhibit No. 120 a r e

24 sequentially numbered.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 101 - 104

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 28 of 115 PageID #:2075
Page 105

1 MR. BURDEN: You know, why don't you

2 and me talk about this off the record because

3 your curiosity is understandable, but it doesn't

4 matter tremendously for the purposes of our

5 testimony.

6 MR. MAY: Okay, yeah. It's just --

7 MR. BURDEN: I'll tell you what,

8 since Mr. Ruth is reviewing, I'll indulge

9 your question on the record. So those were

10 produced by Long Leaf Trading. We Bates number

11 them internally.

12 MR. MAY: Okay.

13 MR. BURDEN: So they're really

14 more control numbers and it's actually not

15 sequential, but the reason you think it is

16 is because there's an email as an attachment.

17 So if the attachment was more than one page,

18 you would see 89750, 89751, 89751, 89751.

19 Does that make sense?

20 MR. MAY: It does.

21 A What are you guys trying to investigate?

22 Like what's --

23 BY MR. BURDEN:

24 Q I can't answer questions here.

Page 106

1 A I mean, maybe you can fill --

2 MR. MAY: It's perfectly --

3 A -- me in.

4 MR. MAY: It's perfectly understandable

5 but, yeah, they cannot answer questions.

6 BY MR. BURDEN:

7 Q Yeah, your counsel can fill you in. He

8 knows what he's doing. All right.

9 MR. MAY: This is 121?

10 MR. BURDEN: That's right.

11 Q All right. So do you recognize CFTC

12 Exhibit 121?

13 A When you say recognize, what do you mean

14 by that?

15 Q Do you know what it is? Have you seen it

16 before? Does it look familiar?

17 MR. MAY: That's a whole bunch of different

18 questions, though.

19 MR. BURDEN: But it illustrates my question

20 to Mr. Ruth.

21 A Does it look familiar? It doesn't.

22 Q All right. So let's look at the From

23 line here, jruth@longleaftrading. That's your email

24 address, right?

Page 107

1 A Yep.

2 Q And it was sent on April 13th of 2017.

3 You worked at Long Leaf Trading during that time,

4 correct?

5 A Correct.

6 Q All right. So it's to James Leeney and

7 Vince Prieto, right?

8 A Yes.

9 Q All right. So who are they?

10 A They are brokers at Long Leaf Trading

11 Group.

12 Q All right. And you'll see the subject

13 is what?

14 A March 2017 Results.xlsx.

15 Q All right. So Exhibit 121 r e f l e c t s

16 that this email has an attachment, is that right?

17 A Yes.

18 Q Yeah. And the attachment is called

19 March 2017 Results.xlsx as well, right?

20 A Yep.

21 Q All right. Is this an email that you sent?

22 A It's what it indicates from the first page.

23 Q All right. So let's turn the page,

24 if we could, please, and this is the attachment

Page 108

1 to the email. Do you know what this is?

2 A It looks like a table.

3 Q All right. Is this a table that you put

4 together?

5 A Possibly.

6 Q Is this type of table something that

7 you would put together regularly while you were at

8 Long Leaf Trading?

9 A I wouldn't use the word regularly.

10 Q Occasionally?

11 A I wouldn't use the word occasionally.

12 Q How frequently would you put together

13 tables like this?

14 A Infrequently.

15 Q All right. So do you recall what

16 this table was meant to represent? What were you

17 telling people with this email, if indeed you sent

18 it?

19 A I think those would be the four trades

20 from, I don't know, either February or March and

21 those were the P&L on the three -- four trades or,

22 again, this is probably in draft form. So I don't

23 know if that's 100 percent accurate, but that would

24 be the net P&L on the four trades. And then through

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 105 - 108

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 29 of 115 PageID #:2076
Page 109

1 Excel I use the table to show based on the number

2 of contracts what that meant for the client.

3 Q All right. So --

4 A But it was sent in April.

5 Q I see that.

6 A So I don't know. I don't know what the

7 purpose of it was for or anything of that nature.

8 Q So how did you put together this table,

9 please.

10 A I don't recall specifically but, I mean --

11 MR. MAY: Well, he's asking you about

12 this table.

13 THE WITNESS: How did I put it together?

14 MR. MAY: Not about tables in general.

15 A I couldn't tell you.

16 BY MR. BURDEN:

17 Q All right. So it looks like the net P&L

18 for one I guess transaction, all the recommended

19 trades, is negative $920.21. Did I read that right?

20 A Can you state that again?

21 Q Yeah, okay. Well, I'll ask you. So do you

22 see where it says net P&L at the bottom?

23 A Yep.

24 Q So do you see where it says $920.21

Page 110

1 in parentheses?

2 A Correct.

3 Q What does that indicate, please.

4 A It may -- I'm speculating here because

5 I don't know specifically -- but it may reflect

6 the net P&L of the four positions for March 2017.

7 Q All right. So forgive me if you feel

8 that I've asked this question before, but how did

9 you ascertain that, if you recall?

10 A I don't recall but ...

11 Q So why did you send this to Mr. Leeney

12 and Mr. Prieto?

13 A No clue.

14 Q All right. Let's put that aside, if we

15 could, please.

16 A (Witness complies).

17 Q All right. So, Mr. Ruth, I want to

18 hand you what I've marked as CFTC 94, and it's

19 a group exhibit that consists of two emails with

20 their attachments. And indicate for me, if you

21 would, please, when you've reviewed it to your

22 satisfaction.

23 MR. MAY: Okay.

24

Page 111

1 BY MR. BURDEN:

2 Q All right. So, Mr. Ruth, do you recognize

3 Exhibit 94?

4 A Nope.

5 Q All right. Do you see at the top where

6 it says jruth@longleaftrading.com?

7 A Yep.

8 Q Was that your email address?

9 A Yes.

10 Q All right. It says June 9, 2017.

11 Did you work at Long Leaf Trading during that time?

12 A Yes.

13 Q Who were Pierre Halteh, Vince Prieto

14 and James Leeney?

15 A Associated persons of Long Leaf Trading

16 Group.

17 Q All right. So the subject says TMM May

18 Results. Do you see that?

19 A Correct.

20 Q And it looks like there's an attachment

21 to this email. Do you see that?

22 A Yep.

23 Q All right. Is this an email that you

24 sent to Mr. Halteh and Mr. Prieto and Mr. Leeney?

Page 112

1 A It appears so.

2 Q All right. And it says, "For your info

3 only." Did you write that?

4 A I don't recall.

5 Q All right. So turn the page for me, if

6 you would, please, and this is the attachment and

7 the filing of the attachment is TMM May Results.

8 Is this a spreadsheet that you put together?

9 A I don't recall.

10 Q Do you have any understanding as to

11 what this shows?

12 A It looks like it gives you a lot

13 of information about the potential profit and loss

14 of the specific trades.

15 Q And when you say the specific trades,

16 you mean the trades that were recommended by Long

17 Leaf Trading to customers, is that right?

18 A I would assume so, yeah.

19 Q All right. And if you look at the

20 right-hand corner of the spreadsheet, you'll see

21 there's a heading that says P&L Per Contract and

22 the one next to it that says P&L Per 3 Contracts.

23 Do you see that?

24 A Correct.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 109 - 112

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 30 of 115 PageID #:2077
Page 113

1 Q All right. So did you put that together?

2 A I don't recall.

3 Q All right. And it looks there

4 like this says that there's a loss of $28.90 per

5 contract that's indicated in Exhibit 94. Is that

6 your understanding of what's going on here?

7 A That's what appears so ...

8 Q All right. Did you put charts like

9 this together and send them to the other brokers

10 at Long Leaf?

11 A I may have. I don't recall specifically.

12 Q All right. So would you turn, please,

13 to the second email in Group Exhibit 94. And this

14 is from your email address, correct?

15 A Yes.

16 Q And it looks like it was sent later in

17 the day on June 9, 2017, right?

18 A Correct.

19 Q All right. And it's to these other brokers

20 at Long Leaf Trading, right?

21 A Correct.

22 Q And the subject is TMM May Results again.

23 Do you see that?

24 A Um-hmm.

Page 114

1 Q Yes?

2 A Correct.

3 Q All right. And then the email body

4 says, "Updated. Don't share." Did you write that?

5 A I don't recall.

6 Q All right. And if you don't recall,

7 I'm asking you to speculate, but do you have any

8 recollection or knowledge of why you would have told

9 these other brokers don't share?

10 A I don't recall.

11 Q All right. And if you look at the

12 second page of this email in Exhibit 121, we've

13 got another couple of charts. Are these charts that

14 you put together?

15 A Actually, going back, I can speculate.

16 Q Okay. Please do.

17 A The reason why I tell people not to

18 share is because this is not the official record

19 of the account and this is just like my math in

20 another system that I use, so I don't want them like

21 giving it to a client or anything of that nature.

22 This is unverified calculations of what I believe I

23 would assume to be true or close to it or something

24 of that nature. But as you can see, I make

Page 115

1 mistakes. That's probably why I had to update

2 it 20 minutes later.

3 Q Got it. So looking at these charts here,

4 are these charts that you generated?

5 A I would assume so.

6 Q All right. And it looks like this

7 indicates losses of $28.90 per contract, is that

8 right?

9 A That's what it says, yep.

10 Q All right. And at the bottom

11 there's another chart that reflects losses of

12 28.89 through $375.57 depending on the number of

13 contracts that the customers entered into. Am I

14 reading this correctly?

15 A I think that's the idea behind that, yeah.

16 Q All right. So how did you put this

17 together? Like how did you work out that this

18 was correct and incorrect, or incorrect what you

19 believed the P&L to be?

20 MR. MAY: Actually, I think that

21 misstates his prior testimony. I don't think

22 he said he recalled putting this together.

23 BY MR. BURDEN:

24 Q Mr. Ruth, did you put this together?

Page 116

1 Is it in an email sent by you?

2 A Yeah. I don't recall specifically,

3 but there's a possibility that I could have done

4 such a thing.

5 Q All right. You know, do you recall

6 how you put this chart together?

7 A No. I think the chart, though,

8 tells you how I put it together. Like isn't that

9 the --

10 MR. MAY: It tells you how someone put

11 it together.

12 A Right. It says all the debits and credits,

13 right?

14 BY MR. BURDEN:

15 Q Is that how you arrived at the --

16 A I don't know. I couldn't tell you

17 from this piece of paper. I'd have to open up the

18 Excel file.

19 Q All right. You can put that one aside,

20 if you would, please, and I'm going to hand you what

21 I've marked as CFTC Exhibit 93.

22 A (Witness complies).

23 MR. MAY: We're a little over the one24 hour mark. Do you guys have any idea about

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 113 - 116

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 31 of 115 PageID #:2078
Page 117

1 how much longer we're going to go before

2 a lunch break?

3 MR. BURDEN: When would you like to have

4 a lunch?

5 MR. MAY: Maybe I need to confer with

6 the witness. It's hard to testify over an

7 hour. That's always been my experience.

8 MR. BURDEN: All right. Well, I'll

9 tell you what. Why don't we get through four

10 more documents and then we'll go to lunch right

11 after that. Does that work for you guys?

12 MR. MAY: Okay. Yeah, I think so.

13 I mean, it's 12:30 now. So maybe -- I don't

14 know how long you think it's going to take.

15 Maybe 1 o'clock?

16 MR. BURDEN: I think so, yeah. That sounds

17 right.

18 MR. MAY: Okay.

19 BY MR. BURDEN:

20 Q Okay. Mr. Ruth, I want to hand you what

21 I've marked as Exhibit 93.

22 MR. MAY: The last one was 94.

23 MR. BURDEN: I know. Thank you, though.

24 MR. MAY: I just want to make sure I get

Page 118

1 it down correctly on my sheet.

2 BY MR. BURDEN:

3 Q All right. So, once again, please

4 review it, indicate to me when you've reviewed

5 it to your satisfaction and we'll get started.

6 MR. MAY: Ready?

7 THE WITNESS: (Nodding).

8 MR. MAY: You're shaking your head yes.

9 So that's not going to come --

10 THE WITNESS: Yes.

11 BY MR. BURDEN:

12 Q There we go. Mr. Ruth, do you recognize

13 Exhibit 93?

14 A No.

15 Q All right. So jruth, that's your email

16 address, right?

17 A Correct.

18 Q All right. And it looks like this email

19 was sent on May 9, 2017, is that right?

20 A That's what it says.

21 Q And it was sent to other brokers at

22 Long Leaf, is that right?

23 A That's what it says, yep.

24 Q All right. So the subject is April

Page 119

1 2017 Results, and the email indicates it has an

2 attachment titled April 2017 Results. Do you see

3 that?

4 A I see that, yes.

5 MR. MAY: Just for the record, I think

6 you said it was sent to other brokers at Long

7 Leaf. It actually lists the three that it

8 was sent to. I just want to make sure the

9 record's clear that it's not the "all brokers

10 at Long Leaf" kind of one that was in an

11 email address before.

12 MR. BURDEN: I think the record will

13 probably reflect through the inclusion of the

14 exhibits --

15 MR. MAY: Okay.

16 MR. BURDEN: -- that Exhibit 94

17 was sent to Mr. Prieto, Mr. Leeney and

18 Mr. Halteh.

19 Q All right. Mr. Ruth, if you would,

20 look at the attachment to the email, please, which

21 is the second page of CFTC Exhibit 93.

22 A Yes.

23 Q Is this a chart that you put together?

24 A Possibly.

Page 120

1 Q Why do you say that?

2 A Because I don't recall.

3 Q All right. So you'll see that there

4 are months listed. We see March '17. Do you see

5 that?

6 A Correct.

7 Q And then April '17, do you see that?

8 A Correct.

9 Q And then May '17, do you see that?

10 A It's blank, but yes.

11 Q Yes, all right. So March '17 it says

12 soymeal, soybeans, gold and cattle. Do you see

13 that?

14 A Correct.

15 Q Do you know what that refers to?

16 A I would assume the four trades during

17 the month of March.

18 Q And that net P&L we see down there,

19 what does that indicate to you?

20 A Again, I don't know if -- the accuracy

21 of the number but it's -- it would be the net result

22 of the net P&L of the four trades above.

23 Q And is that something that you calculated?

24 A Possibly.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 117 - 120

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 32 of 115 PageID #:2079
Page 121

1 Q Do you remember calculating it?

2 A No.

3 Q So let's look at the April '17 column.

4 We see crude oil, U.S. T-bonds, cocoa and Euro.

5 Are those also contracts that were recommended to

6 customers for Time Means Money?

7 A I have absolutely no clue.

8 Q Well, it says net P&L at the bottom.

9 Do you know what that means?

10 A Yes.

11 Q What does that mean, please.

12 A The net profit and loss.

13 Q All right. And what is the net profit

14 and loss here for customers who entered into one

15 trade?

16 A I don't know if that is the net

17 profit and loss for customers, so I can't answer

18 that question.

19 Q All right. Well, you see at the

20 top it says -- we've got the date and then we have

21 numbers 1 through 13, right? Do you see that?

22 Right?

23 A Correct.

24 Q All right. So we've seen substantially

Page 122

1 this same format in Exhibits 94 and 121, the last

2 couple exhibits we looked at, is that right?

3 A What are you asking?

4 Q Well, this looks like the same format

5 as the other charts we've been looking at. Do you

6 agree with that statement or do you disagree with

7 that statement?

8 A Disagree, disagree.

9 Q All right. So why is this statement

10 in -- or the table in Exhibit 94 different than the

11 other ones that we were looking at?

12 A I couldn't tell you.

13 Q But you just did. You just said it was

14 different. So I'm asking you how is it different,

15 please.

16 MS. STREIT: This is 93.

17 A They're two different -- I mean, they're

18 significantly different.

19 BY MR. BURDEN:

20 Q What's different about them, please.

21 A Well, 94 lists the asset name, the month,

22 the expiration date, the clearing per side in, fees

23 per side out, commissions in, total fees in, point

24 collection, point multiplier, premium collection,

Page 123

1 net collection, gross risk, net risk, clearing

2 per side out, fees per side out, commissions out,

3 total fees out, premium realization, futures P&L,

4 P&L per contract and P&L per 3 contracts. So that's

5 one table. Then this table --

6 Q Yeah. So let's --

7 A -- has none of that information.

8 So it's significantly different.

9 Q All right. I see what you're saying.

10 I was focused on the P&L. Let's just get back to

11 93, if we could, please. So your testimony is that

12 you don't recall putting this chart together?

13 A Correct.

14 Q Do you recall sending this chart?

15 Did maybe somebody else put it together for you

16 and you distributed --

17 A I'm not saying that somebody put

18 it together. I just don't recall putting together

19 the chart.

20 Q Right. Do you recall sending this chart

21 to people?

22 A No.

23 Q Do you recall reviewing the chart?

24 A No.

Page 124

1 Q Okay. Let's put this one aside, if we

2 could, please.

3 A (Witness complies).

4 (Whereupon CFTC Exhibit No. 122 w a s

5 marked for identification, MM.)

6 Q Mr. Ruth, I want to hand you what I've

7 marked as CFTC Exhibit 122. So, once again, please

8 review it to your satisfaction and indicate to me

9 when you're done and I'll ask you questions about

10 it.

11 MR. MAY: Ready?

12 A Oh, yeah, yes.

13 BY MR. BURDEN:

14 Q All right. Mr. Ruth, do you recognize

15 Exhibit 122?

16 A No.

17 Q All right. You see this is from

18 jruth@longleaftrading.com. That was your email

19 address, right?

20 A Correct.

21 Q So it was sent July 25, 2017. You

22 were working at Long Leaf at that point, right?

23 A Correct.

24 Q All right. And it was sent to

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 121 - 124

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 33 of 115 PageID #:2080
Page 125

1 Tim Evans and he was your boss at Long Leaf,

2 correct?

3 A Correct.

4 Q And the subject is Harish Patel. Do you

5 see that?

6 A Correct.

7 Q Who is Harish Patel, please.

8 A He was a customer of mine.

9 Q All right. So if we look at the

10 top, it says started with $25,707.32, it says

11 ended with $9,249.72. And then in bold it says

12 total loss $16,457.60 and then it says total

13 commissions $29,820. Am I reading that right?

14 A Yes.

15 Q All right. So is this an email that

16 you sent?

17 A I don't recall.

18 Q Do you remember -- well, I guess if

19 you don't remember sending it, you don't remember

20 why you sent it.

21 A Harish Patel would refuse to talk to

22 me and wanted to talk to Tim Evans, so Tim Evans

23 had to step in. I think he may have filed an NFA

24 complaint. I don't know. I don't have a complaint

Page 126

1 on my record and he was my customer. So I don't

2 know exactly what happened, but I believe -- and

3 I might be speculating here -- but Tim probably

4 asked me for like give me the information on his

5 account so I have information to like talk to him

6 with.

7 Q Got it. So how were you able to

8 figure this out, if you recall, what the total

9 loss, total commissions and started and ended?

10 How did you figure all that stuff out?

11 A So I went to his first statement and

12 I looked and seen how much money he deposited.

13 I looked at his last statement, which he didn't

14 have any open positions. So his net liquidating

15 value would be his current value, you know. It's

16 flat. And I subtracted that number from what he

17 started with and I ended up with total loss. And

18 then total commissions, I probably went to that

19 account sequence document that we talked about

20 earlier.

21 Q And that totals up commissions, right?

22 A Again, that one I don't think

23 is accurate either because I'm not sure if it

24 reflects like commission credits or anything of

Page 127

1 that nature. So I probably pulled that information

2 from there, but I don't know if that's actual --

3 how that's calculated.

4 Q Got it. So did you perform an analysis

5 like this with respect to any other clients' profits

6 or losses?

7 A No. I think this was just specific

8 to the situation because I was handing it off to

9 somebody else.

10 Q Got it.

11 A But to go back, how do you generate

12 $29,000 in commissions if you're not making any

13 money for the client when they only put in 25,000?

14 Q I don't know, and I can't answer

15 questions anyway. You can put that one aside,

16 if you could, please.

17 A (Witness complies).

18 (Whereupon CFTC Exhibit No. 123 w a s

19 marked for identification, MM.)

20 Q All right. Mr. Ruth, I want to hand

21 you what I've marked as CFTC Exhibit 123. Please

22 review it to your satisfaction and indicate to me

23 when you've finished.

24 THE WITNESS: I'm ready when you are.

Page 128

1 MR. MAY: Give me a second. Okay.

2 BY MR. BURDEN:

3 Q All right. Mr. Ruth, do you recognize

4 C F T C Exhibit 123?

5 A No.

6 Q All right. So it's an email, is what

7 it appears to be, and it appears to be sent from

8 jruth@longleaftrading. That's your email address,

9 right?

10 A Correct.

11 Q All right. And it's from --

12 MR. MAY: Did you say is or was?

13 MR. BURDEN: Was.

14 MR. MAY: Okay. I thought you said is.

15 MR. BURDEN: I might have.

16 Q This was your email address, correct?

17 A Yes.

18 Q All right. So the date that it appears

19 to have been sent is July 20, 2017, right?

20 A Correct.

21 Q And you worked there during that time?

22 A Yes.

23 Q And it was to Mr. Evans, who was your

24 boss at Long Leaf Trading, correct?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 125 - 128

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 34 of 115 PageID #:2081
Page 129

1 A Correct.

2 Q And the subject there is Emailing: TMM

3 2017 Win-Loss. Do you see that?

4 A Yeah.

5 Q And then there's an attachment and

6 that's a spreadsheet, and that spreadsheet is titled

7 in the face of the email --

8 A Yeah.

9 Q -- TMM 2017 --

10 MR. MAY: Wait. You can't answer

11 his question until he's done asking it.

12 MR. BURDEN: Thanks.

13 MR. MAY: Sorry.

14 MR. BURDEN: That's all right.

15 Q So TMM 2017 Win-Loss and it's a

16 spreadsheet. Do you see that?

17 A Yes.

18 Q All right. So is this an email that

19 you sent to Mr. Evans?

20 A It appears so.

21 Q Is it an email that you remember sending?

22 A No.

23 Q All right. So let's turn the page,

24 if we could, please. Do you see this table?

Page 130

1 A Yes.

2 Q Is this a table that you generated?

3 A I don't recall specifically.

4 Q All right. Do you have any knowledge

5 or understanding of -- and you'll have to forgive

6 my vague question -- what's going on here?

7 A Yeah, this has nothing to do with

8 like account performance. I think Tim Evans,

9 if I recall, at the time Tim Evans I think was

10 trying to contemplate whether or not doing like

11 a CTA. And I think this is just like minus

12 commissions, fees or whatever did the trade win

13 or lose because he was going to do like a -- set

14 up a CTA like in a fee-free environment. So what

15 would it, like, look like in the event that that

16 happened. And I gave him basic information whether

17 or not a trade won or lost, meaning did it make

18 a dollar or lose a dollar, but that has nothing

19 to do with -- or like aided anything of knowing

20 about account performance. I think it was for

21 that purpose.

22 Q Got it. So Mr. Evans wanted to

23 explore the idea of setting up a CTA and he asked

24 you to put this analysis together?

Page 131

1 A Yeah, but I don't know if -- I don't

2 know. I don't know if it's a good analysis or

3 whatever. But essentially, yeah, he was trying

4 to figure out do we win more than we lose.

5 Q All right. And what's the result of that

6 analysis that we see here?

7 A It looks like we're 50/50, but yeah.

8 But it doesn't -- I mean, that's the thing. It's

9 incomplete information because you could lose

10 $5 million on sugar and win a dollar on crude oil

11 but you're still an overall loser. So it doesn't

12 really -- I don't think this is -- I don't think

13 this was helpful at all.

14 Q Got it. No, no, and you answered my

15 next question before I asked it. Did you talk to

16 Mr. Evans about this analysis we see in Exhibit 123?

17 A I don't recall specifically. I mean,

18 I don't recall.

19 Q Well, do you have any general recollection

20 of discussions with Mr. Evans?

21 A I would assume that I handed it to

22 him and then -- or it looks like I emailed it

23 to him and I probably said did you get my email.

24 That's about it.

Page 132

1 Q Well, do you recall any other discussions

2 you had with Mr. Evans about it? Like did Mr. Evans

3 say, you know, oh, great work, thanks or did he have

4 questions or did he not like it?

5 A I don't recall.

6 Q All right. So let's put this one aside,

7 if we could, please.

8 A (Witness complies).

9 Q And I want to show you what's been

10 marked as CFTC Exhibit 95. And, again, please

11 take a look at it and indicate to me when you've

12 looked at it.

13 MR. MAY: Ready.

14 BY MR. BURDEN:

15 Q All right. Mr. Ruth, do you recognize

16 CFTC Exhibit 95?

17 A Nope.

18 Q All right. This email is sent from your

19 email address, correct?

20 A Was my email address, yes.

21 Q Was your email address. And it's

22 sent in August of 2017. And at that time you were

23 working for Long Leaf, right?

24 A Correct.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 129 - 132

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 35 of 115 PageID #:2082
Page 133

1 Q And you're sending it -- or it purports

2 to be sent by you to James Leeney, is that correct?

3 A Correct.

4 Q And he's a broker at Long Leaf Trading,

5 correct?

6 A Correct.

7 Q All right. So the subject is Copy of

8 Time Means Money 2017 Win-Loss. Do you see that?

9 A Correct.

10 Q And the email bears an attachment with

11 the same file name. Do you see that?

12 A Correct.

13 Q All right. Turn the page, if you would,

14 please. Do you know what this is?

15 A Yeah. Me and James Leeney were

16 plotting to leave Long Leaf Trading Group, and

17 this is the same document as before I think with

18 an extra month on it. And it's how are we losing

19 money if we're not -- basically it was more of like

20 sell me on how you're going to design this strategy

21 when we go off on our own where if we're hitting

22 these numbers, that our clients are profitable.

23 Q Got it. So you sent this to Mr. Leeney

24 so you could see what was going on and improve upon

Page 134

1 it when you went on your own?

2 A Correct.

3 Q All right. So did you have any

4 discussions with Mr. Leeney about this?

5 A Just, I mean, like, you know,

6 we need to decrease the amount of risk that

7 we're taking on the trades so that these losers

8 aren't -- I mean, as you can see, 50 percent is

9 pretty good, 75 percent is excellent. So how can

10 we -- if we -- it's, you know, there's a trend that

11 we win 50 percent of the time, how can we still be

12 profitable for our clients and win 50 percent of

13 the time.

14 Q All right. And when did you have this

15 discussion with Mr. Leeney?

16 A I mean, my desire to leave Long

17 Leaf Trading Group occurred either in like June

18 or July, and me and him started like plotting on

19 making the move.

20 Q Did Mr. Leeney ultimately agree to make

21 that move with you?

22 A Yeah.

23 Q And you guys both left for Postrock?

24 A Correct.

Page 135

1 Q Have you had discussions with

2 Mr. Leeney about joining your GIB if you can

3 get that started?

4 A No.

5 Q So did you make any conclusions?

6 I think your testimony is that you were looking

7 for ways to sort of do better for customers,

8 is that right?

9 A Well, it was more specific about our

10 operation, like how -- you know, just we were

11 talking about he was going to be in charge of

12 trading. So I wanted to figure out how we can,

13 you know, I mean, what we do all day is try to

14 improve results for clients.

15 Q So what conclusions did you reach

16 as to how you could improve results for clients?

17 A From this?

18 Q Sure.

19 A I mean, if I were designing trades,

20 which I never did, like I just said, the -- we've

21 got to make sure that these losers don't wipe out

22 all the winners.

23 Q And how did you determine or how

24 did you -- what ways did you identify to sort of

Page 136

1 make that happen?

2 A I mean, the amount of risk that was --

3 like if it was a full loss, I mean, going back

4 to like Exhibit let's say 94, you can't have like

5 $1,000 losses, $900 losses. So I wanted to make

6 sure that number's smaller.

7 Q Got it. So the table on Exhibit 50,

8 it appears to go back from January 2017 through

9 August of 2017, is that right?

10 MR. MAY: I think you said Exhibit 50,

11 but it's Exhibit 95 I think you're looking at.

12 BY MR. BURDEN:

13 Q Wait, Exhibit 95. Let's look at

14 Exhibit 95.

15 A Yeah. I mean, again, this isn't for --

16 I think, I mean, if you're going down the path of

17 this is like --

18 MR. MAY: Well, let him ask the question.

19 That way you know what you're answering.

20 BY MR. BURDEN:

21 Q Yeah. So Exhibit 95 here, this shows

22 winning and losing trades from January through

23 August of 2017, is that right?

24 A I can't answer that question. I don't

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 133 - 136

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 36 of 115 PageID #:2083
Page 137

1 know.

2 Q Well, do you recall what this was supposed

3 to tell people?

4 A It's not supposed to tell. It's just

5 for me and Jamie that, hey, where we're at right

6 now, we're not that far off. There's some tweaks

7 that we need to make in order to increase account

8 performance. That's basically I think the premise

9 behind this.

10 Q Okay. I don't mean to ask a question --

11 A Like that's what I'm trying to say.

12 Q Yeah.

13 A Like if I can provide a narrative,

14 I'd like to say that this isn't me knowing that

15 the accounts were not performing well or anything

16 of that nature. This is me just analyzing like,

17 you know, can we do this and like, if so, how are

18 we going to do this for another operation that me

19 and him were planning on.

20 Q Got it. So looking again at Exhibit 95,

21 the one you've got in front of you, how did you

22 determine, for example, for January that 50 percent

23 were winners or for February that 50 percent were

24 winners?

Page 138

1 A I don't specifically recall, but

2 maybe -- I don't know if you want to call it

3 speculating, but I think it just had to be like

4 one cent in the black or one cent in the red to

5 be considered a winner or loser.

6 Q But how do you know, like what do you

7 look at to determine if a trade is in the red or

8 in the black?

9 A I can't tell from this information,

10 but I don't know if that was net commissions and

11 fees or if it was inclusive of them or anything of

12 that nature, but maybe it was just the idea itself.

13 I don't know.

14 Q Well, did you --

15 A I would assume that this, since it's

16 similar to the one that I sent to Tim Evans, I

17 think, if I recall correctly, that was not including

18 commissions and fees or maybe it was including

19 fees but not commissions because he was trying

20 to simulate a fee-free environment. And this

21 looks like this is the same result, so I would

22 assume that it doesn't account for commissions

23 as well.

24 Q Got it. Did you review account

Page 139

1 statements, customer account statements to determine

2 whether a trade was in the red or in the black?

3 A I mean, I probably didn't just pick

4 them out of a hat and guess, but I don't recall

5 specifically how I came to that information.

6 Q All right. So I've been asking you

7 questions and showing you exhibits sort of designed

8 to gauge your knowledge and understanding of trading

9 results at Long Leaf. You picked up on that, right?

10 A Yes.

11 Q Yeah, that's the point of this line

12 of questioning. So did Mr. Evans ever tell you

13 how customers were doing?

14 A No. I mean, it was kind of like an

15 unwritten rule, like don't talk about it because,

16 you know, you've got to manage people's emotional

17 states so ...

18 Q When you say unwritten rule, like whose

19 rule was it?

20 A Like let me give you an example.

21 Let's say you're a quarterback of a football team

22 and you just threw an interception. You don't go

23 up to the quarterback and say so how about that

24 last play. Like the guy is going to be very upset,

Page 140

1 angry, things of that nature. Like you're step --

2 you know, you're kicking somebody while they're

3 down. Like they're not happy that they threw an

4 interception or they lost a trade or whatever.

5 So you don't really -- you don't talk about that

6 kind of stuff.

7 Q But what I'm asking is did Mr. Evans

8 tell you how the trades were doing? Like did

9 Mr. Evans say our trades this month made this much

10 money or lost this much money?

11 MR. MAY: So did Mr. Evans recap the

12 trades, is that --

13 MR. BURDEN: Sure.

14 A I mean, I don't recall specifically.

15 I would assume part of the reason why I'm making

16 these charts is because I don't have that

17 information so ...

18 Q Is that why you were making the charts?

19 A Probably at those times, yeah.

20 Q Did you ever ask Mr. Evans for P&L numbers

21 for trades or for customers?

22 A I mean, I would assume at some

23 point, yeah. But then I think it turned into

24 like go figure it out on your own, and that's

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 137 - 140

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 37 of 115 PageID #:2084
Page 141

1 when I learned -- that's when I actually learned

2 how to read a statement.

3 Q So let me drill down on that. Do you

4 recall the first instance where you asked Mr. Evans

5 how the customers were doing?

6 A No.

7 Q Did you ever ask Mr. Evans how are

8 the customers doing or anything to that effect?

9 A I mean, he would -- I don't know. Like,

10 I mean, I would have to report to them what was

11 going on. So I don't know exactly how and when and

12 what periods of time I obtained that information.

13 But if we did well, I would tell somebody we did

14 well and if we did poorly, I would tell somebody

15 we did poorly.

16 Q All right. What I'm asking about,

17 though, is what Mr. Evans told you, right? Like

18 every month Long Leaf Trading would recommend four

19 trades to customers, right?

20 A Yeah.

21 Q So at the end of every month did

22 Mr. Evans say or otherwise communicate to you this

23 is how the trades did?

24 A Yeah. But that's the thing, is like

Page 142

1 I don't want to say I'm a black-and-white person

2 but I'm like a -- as you can tell, I like dollars

3 and cents. He would be, oh, about 500. So I

4 wouldn't get like a specific number, and so I always

5 felt like invaluable or unintelligent talking to a

6 customer when I'm not -- like you're giving them

7 like round numbers and stuff. It just sounds odd

8 to me. So --

9 Q How -- sorry, keep going. I didn't mean

10 to cut you off.

11 A Yeah, it sounds odd to me. But I think --

12 I don't know what you're getting at, but it's not

13 like I sat here and knowingly knew that our clients

14 were losing money month after month and I didn't

15 care.

16 Q Well, did you think they were making

17 money month after month?

18 A I think they were making money at

19 times, yeah. That's the thing is, again, going

20 back to my mentality, is we live like month to

21 month. So, you know, somebody can't generate

22 $30,000 in commissions when they only started

23 with 25,000. So in my opinion they had to be

24 making money at some point.

Page 143

1 MR. MAY: What exhibit are you pointing

2 at?

3 THE WITNESS: Sorry, Exhibit 122.

4 BY MR. BURDEN:

5 Q Yeah. So, Mr. Ruth, what I want to

6 try to figure out is what did Mr. Evans tell you

7 about the profitability of the recommended trades,

8 if anything, if you remember?

9 A I mean, he wasn't like deceitful of them

10 but --

11 Q Well, let me ask you this. Did Mr. Evans

12 tell you every month how the recommended trades

13 wound up doing?

14 A Yes, but it's like a ballpark --

15 Q Got it.

16 A -- very vague situation. So sometimes

17 I don't like that answer, so I would go out and then

18 I would go to the statements and come down to the

19 specific penny.

20 Q So every month Mr. Evans would provide

21 you with how the recommendations did from the month

22 before, but it was sort of round numbers, is that

23 right?

24 A I can't say every month, but yeah.

Page 144

1 Like where I gathered the information, the idea

2 of are we having a winning month or a losing month

3 started from Tim Evans.

4 Q There we go. So what did Mr. Evans say

5 to you?

6 A Either we have a profitable month,

7 you know, or a bad month.

8 Q And would he do this every month on

9 a regular basis so you knew?

10 A Yeah, yeah.

11 Q Okay. So every month --

12 A I mean, you would have -- you can't

13 just pick up the phone and call somebody and not

14 have that information so ...

15 Q Right. So every month Mr. Evans would

16 tell you how customers had done with the last set

17 of recommendations?

18 A In the sense of whether it was a

19 positive month, which means one cent more, or if

20 it was a negative month, which meant one cent less.

21 Q So your testimony is that Mr. Evans

22 would tell you if customers made money or lost

23 money but not how much?

24 A Correct.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 141 - 144

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 38 of 115 PageID #:2085
Page 145

1 Q Did you ever ask him --

2 A Sometimes, sometimes he could say it

3 but like it wasn't like regular, you know, policy

4 or anything.

5 Q Did you ever ask him how much money

6 did they make or how much money did they lose?

7 A Yeah. But, I mean, I wouldn't get an

8 answer necessarily that satisfied me.

9 Q What kind of answer would he give that

10 didn't satisfy you?

11 A Anything that doesn't have anything

12 to the specific penny.

13 Q All right. I mean, do you feel

14 like Mr. Evans didn't want to tell you, like --

15 A No, no. It's just that like he's not

16 an attention-to-detail guy.

17 Q All right. So and this forced you to

18 go out and figure out --

19 A Maybe it was his play of like getting

20 me to learn on my own and learn the statements so

21 I didn't have to ask. I don't know. Maybe that was

22 like his style of teaching. I don't know exactly

23 what his intentions are, but yeah. I mean, you

24 guys have seen my emails. I think I'm more of

Page 146

1 an attention guy than he is. So he's very vague.

2 I mean --

3 MR. MAY: We're almost to 1 o'clock.

4 I don't know if you have any more exhibits.

5 MR. BURDEN: It sounds like Mr. Ruth

6 was saying something.

7 Q But if you want to finish your thought,

8 we can break for lunch.

9 A I mean, just from like a customer

10 satisfaction standpoint, I think that my customers

11 appreciated hearing $536.97 instead of about $600,

12 you know. So I -- I don't know. I guess I take

13 my job more seriously or I, you know, wouldn't

14 appreciate that if I was a customer. So that's

15 why I would do it.

16 Q Did you call your customers and tell

17 them how the trade recommendations had turn out?

18 A I mean, I was constantly talking to my

19 customers. So, yeah, that's part of the process.

20 Q So how did you know then what that number

21 was to tell them?

22 A Well, first, it depended like throughout

23 my career at Long Leaf evolved. So in the beginning

24 I started off with like, all right, we did well this

Page 147

1 month. And why did we do well, because Tim Evans

2 told me we did well. How well did we do? I think

3 we made about $300, and that's what I would tell

4 them.

5 Q Okay.

6 A And then as I matured and became

7 more knowledgeable, I think at the end I got down

8 to the penny and I like prided myself on that.

9 Q And that was something you were able to

10 figure out yourself from the statements, correct?

11 A Yeah. But, I mean, obviously I'm telling

12 them like, you know, your account statement's the

13 official record. I can make mistakes but I think,

14 to the best of my knowledge, that this is the actual

15 number.

16 Q So did you tell your customers, you

17 know, regularly whether they had made money or lost

18 money on trades and how much?

19 A I don't -- I mean, I don't recall

20 exactly the frequency in which I did it and whether

21 or not it was standard to everyone. But, I mean,

22 I tried to have -- I tried to treat everybody,

23 deal with everybody the same way so that you

24 don't miss anything.

Page 148

1 Q So your practice at Long Leaf Trading

2 as a general matter would be to communicate with

3 clients and tell them whether they had made or lost

4 money, correct?

5 A On the individual month --

6 Q Got it.

7 A -- the specific trades that I have

8 information on, correct. Now, if a trade went

9 into the next month, I don't have that information.

10 So I would either speculate as to where I think it

11 could go or I would say here's where it's at now,

12 you know. Either we're going to lose everything

13 or if it stays there, we're going to make it,

14 whatever. But I would give the information going

15 back to the realized P&L that I had or if it

16 happened that day, I would say it expired worthless,

17 so maybe I'm off by like 20, 30 bucks. I don't know

18 until I see the clearing fees on the statement the

19 next day or two.

20 Q So was it your practice to tell clients

21 how they were doing at the end of every month? Like

22 when do you do this call?

23 A Yeah. I mean, I think it's -- yeah,

24 I think it's important. I think that was the

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 145 - 148

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 39 of 115 PageID #:2086
Page 149

1 whole purpose of the program is is that in a

2 managed situation the only time you know about

3 account performance is when you look at your

4 account statement and not -- people don't

5 necessarily do that regularly. And I don't want

6 them to go, oh, shit, what happened, you know,

7 when they could have stopped it five months ago.

8 So yeah, I mean, that's kind of the premise behind

9 it. But, I mean, some clients, like they like to

10 be treated differently or whatever. So I'm not

11 going to say under oath that every single time I

12 did it this exact same way to every single person.

13 Like everybody -- that was the whole purpose of it,

14 was we'd customize the way in which we interacted

15 with you.

16 Q Got it. So how could you -- one

17 more and then we ought to do our lunch. So how

18 did you know how customers were doing? Was it just

19 from looking at the statements?

20 A When you say "were doing," to me

21 that makes it sound how are you doing overall.

22 Q No, no. Let's make it month to month.

23 I'm not trying to get you to say something you don't

24 want to say.

Page 150

1 A Yeah, I only live month to month in this

2 situation.

3 Q So, yeah.

4 A I don't think about what happened

5 before it. I don't think about what's happening.

6 I only live in that one month. That's all I --

7 Q Got it.

8 A -- worry about. So if you were to say

9 is this client making money, I would say, well, are

10 our trades making -- yes, then this client's making

11 money.

12 Q But how would you figure that out?

13 A It would start off from Tim Evans

14 saying we're either making money or losing money.

15 And then as my career evolved, it got down to me

16 being able to know how to utilize the statement

17 to be able to figure that information out to the

18 specific penny.

19 Q Did Mr. Evans ever tell you that

20 customers were making money and you found out they

21 weren't?

22 A I think like one time I calculated it

23 where he said that like we're going to make like a

24 hundred bucks this month or something or basically

Page 151

1 break even, and then I actually did the math and

2 we lost like 40 or something. So it was because

3 of the fact that he was ballparking it that --

4 and it was so close to the line of made money or

5 didn't make money, like I can recall where that

6 wasn't the case or whatnot. But, no, I don't think

7 he would be -- he wouldn't tell us that we made

8 money and not --

9 Q Got it. So Mr. Evans didn't misrepresent

10 customer results to you?

11 A I mean, you could make -- I mean,

12 a blanket statement like that, you could say

13 that he did because of the fact that he didn't give

14 me accurate numbers. He gave me ballpark numbers.

15 Q Got it. So it sounds like your

16 testimony is that Mr. Evans accurately told you

17 whether trades had won or lost, save it sounds like

18 for one occasion where a position hadn't been closed

19 out yet?

20 A Well, and the other thing you've got to

21 consider too is sometimes those four trades don't

22 close in that month, right? So if somebody were to

23 say how did we do this month and I have two of the

24 trades that closed, even though I know the other

Page 152

1 two are losers, well, technically this month

2 we did what we did and let's say those two were

3 winners. So then that person says, well, oh, okay.

4 Well, all right. Well, let's do the next four

5 trades. And then those two, you know, let's say

6 they're currencies. So it's like the first week

7 into next month they come and they're both losers

8 and they get walloped. And then, you know, the next

9 time you talk to them it's a little bit different.

10 So, you know, those results can change if they're

11 not realized. And so at the time, you know, that

12 you communicate with them you're trying to give

13 them as much information as possible to know where

14 they could end up and get them to understand that

15 these are unrealized, you know. They're where

16 we need them to be right now. They could change.

17 Best case scenario you're looking at this, worst

18 case scenario we're looking at that, you know.

19 We feel comfortable about it. That's why the

20 position's still open. If we didn't think it

21 was, you know, going to stay in that spot and

22 we bleed more time decay off the option then, you

23 know, why would we -- we wouldn't keep it open.

24 So -- but then there's times where, you know,

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 149 - 152

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 40 of 115 PageID #:2087
Page 153

1 that all changes in those next couple weeks and

2 the realized P&L becomes a significant loss and

3 then the whole month becomes a loss but you already

4 told them that it was a winner. And so then

5 they're like, well, you told me we were making

6 money. Well, I was, sir, but we were talking about

7 the realized ones. So that's where there could be

8 confusion on something of that nature and between

9 Tim Evans and clients.

10 Q Got it.

11 MR. BURDEN: Well, I'll tell you what.

12 I promised you guys a lunch and then I kept

13 going, so my apologies. Let's go off the

14 record, please.

15 (Whereupon a lunch recess was taken

16 from 1:15 p.m., to 2:34 p.m., after

17 which the following proceedings were

18 had:)

19

20

21

22

23

24

Page 154

1 A F T E R N O O N S E S S I O N

2 JEREMY RUTH,

3 called as a witness herein, having been previously

4 sworn and examined, testified further as follows:

5 FURTHER EXAMINATION (Cont'd.)

6 BY MR. BURDEN:

7 Q All right. I want to follow up on

8 some testimony you gave before the break. You

9 testified that you were a dollars and cents guy,

10 is that right?

11 A In certain circumstances.

12 Q All right. And that you were detail

13 oriented, or at least more detail oriented than

14 Mr. Evans, is that right?

15 A In certain circumstances, yeah.

16 Q All right. So did Mr. Evans ever tell

17 you some trading results and you went and checked

18 and you felt like they were wrong?

19 MR. MAY: I think that's been asked

20 and answered, but you can go ahead and answer

21 it.

22 A I didn't check because I thought they

23 were wrong. I just was doing the calculations and

24 it turned out it was wrong.

Page 155

1 BY MR. BURDEN:

2 Q In one instance, is that right?

3 A That I recall, yes.

4 Q Got it. Are there any other instances

5 you recall where Mr. Evans told you something and

6 then you did some work and found out, you know,

7 it wasn't true?

8 A Not that I recall.

9 Q All right. And that instance

10 where you'd found Mr. Evans said something about

11 results that wasn't right to you, when was that

12 approximately, please.

13 A I don't recall.

14 Q All right.

15 A I can give you a year.

16 Q That would be great, yeah.

17 A 2017.

18 Q Mr. Ruth, did you receive regular --

19 you know, I keep saying regular. I'll just ask

20 you did you receive complaints from customers about

21 account performance while you were at Long Leaf?

22 A How do you define complaints?

23 Q Customers expressing displeasure about

24 poor account performance.

Page 156

1 A Yeah, all the -- frequently, yeah.

2 Q Okay. How frequently would you say?

3 A I don't know. I don't know if frequently's

4 the right word. But, yes, I did receive complaints

5 about account performance.

6 Q And did you receive those complaints sort

7 of consistently throughout your tenure?

8 A I don't know. No.

9 Q When did the complaints start?

10 A I mean, if I like were to say like

11 notable stuff, it would probably be in 2017.

12 Q Got it. Was that early 2017, late 2017?

13 A I don't know exactly.

14 Q I'm sorry?

15 A I don't know exactly.

16 (Whereupon CFTC Exhibit No. 124 w a s

17 marked for identification, MM.)

18 Q All right. Well, let me hand you what

19 I've marked CFTC Exhibit 124. And let me know when

20 you've looked at it, please.

21 MR. MAY: Okay.

22 BY MR. BURDEN:

23 Q All right. Mr. Ruth, do you recognize

24 Exhibit 124?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 153 - 156

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 41 of 115 PageID #:2088
Page 157

1 A No.

2 Q Do you know who Rob Mixer is?

3 A Yes.

4 Q Who's Rob Mixer, please.

5 A He was a customer of mine.

6 Q All right. So if you look at the bottom --

7 MR. MAY: Did you say is a customer or was?

8 THE WITNESS: Was.

9 MR. MAY: Okay.

10 BY MR. BURDEN:

11 Q All right. So if you look at the

12 bottom of Exhibit 124, it reflects an email sent

13 from Rob Mixer to you, is that correct?

14 A Yes.

15 Q All right. So Mr. Mixer writes,

16 and I'm looking at the middle paragraph here,

17 "I need to cut my losses. My account is down

18 33 percent when I look at my cash balance.

19 At this point I need a 50 percent return on current

20 capital just to get back to where we started a year

21 ago. Even if you met the targeted 20 percent return

22 per year that we initially discussed, it will be

23 two plus years to recover. Also, I have not had

24 a single account review and the initial agreement

Page 158

1 was at least quarterly reviews."

2 So is what Mr. Mixer is writing

3 here, is that accurate? Was Mr. Mixer's account

4 down 33 percent at this point, August 2016?

5 A I would assume not.

6 Q Why do you think that?

7 A Because he says something about cash

8 balance, and a cash balance doesn't reflect the

9 value of the account.

10 Q Do you recall the balance or the value

11 of Mr. Mixer's account at that point?

12 A Couldn't tell you.

13 Q All right. So you write back, "Rob,

14 thanks for reaching out. I want to address this

15 immediately. What time are you available tomorrow

16 to take my call?" Did you write that?

17 A It appears so.

18 Q All right. Do you recall having

19 any discussion with Mr. Mixer about this email?

20 A Do I recall the conversation?

21 Q Yeah.

22 A No.

23 Q Do you remember if you had one or not?

24 A Couldn't tell you.

Page 159

1 Q All right.

2 A Did I?

3 Q I'm sorry?

4 A Do you know if I did?

5 Q I can't testify. I can't tell you.

6 A Right. I don't know.

7 Q So I think you testified that you

8 received complaints from customers. What did you

9 do with those complaints?

10 A I gave them to Tim Evans.

11 Q And how did you give them to him?

12 A Either verbally, I'd print out the

13 email, show it to him, forward it to him. I don't

14 know. Many different ways.

15 Q So you didn't always forward it, right?

16 A Not -- my job is immediately when

17 a complaint comes in is to notify the compliance

18 officer.

19 Q And that's Mr. Evans?

20 A Yeah.

21 Q And did you --

22 A How I do it, I don't -- it's not --

23 there's no specific policy, but it was my job to

24 bring it to the attention of the compliance officer.

Page 160

1 Q And did you always do that?

2 A Yes.

3 Q All right. So how did Mr. Evans respond

4 to these complaints?

5 A I mean, I don't necessarily recall.

6 Q Do you know if Mr. Evans would call that

7 customer?

8 A He would generally have us like brokers

9 do it.

10 Q Got it.

11 A Sometimes he would -- I mean, going

12 back to that Harish Patel guy, I mean, he did in

13 that situation.

14 Q So as a general matter, would Mr. Evans

15 have you call customers that complained?

16 A I think it depends on the nature of the

17 complaint.

18 Q All right. Well, was there a policy?

19 A Each -- no.

20 Q Can you break it down?

21 A I think each individual instance

22 is evaluated and a determined course of action

23 is taken.

24 Q So how did you know what to say

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 157 - 160

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 42 of 115 PageID #:2089
Page 161

1 to customers that were complaining or unhappy?

2 A I listened to Comcast recorded phone calls.

3 Q What do you mean by that? What's a Comcast

4 recorded phone call?

5 A Comcast is a company that is known

6 to have very poor customer service, and I would

7 listen to their phone calls and see how they would

8 interact with people.

9 Q Oh, so you mean you would listen

10 to calls that people had recorded with Comcast

11 customer service?

12 A Yes.

13 Q And where did you find these calls?

14 A YouTube.

15 Q And what did you learn from these calls?

16 Like --

17 A What not to say.

18 Q All right. Well, how did you know what

19 to say?

20 A I mean, I would state what I would know

21 to be factual if they asked me questions. Yeah,

22 I don't know. I mean, I don't recall specifically

23 what I said or if I even had a conversation with

24 Rob Mixer so ...

Page 162

1 Q Well, setting aside the specific

2 example of Rob Mixer, when you talked to customers

3 that had complained did Mr. Evans say, hey, you

4 know, say this or otherwise give you a script

5 or instructions?

6 A I mean, yeah. I mean, I think the

7 purpose of going to the compliance officer is so

8 he could tell you how we're going to deal with the

9 situation. I would assume at times he gave me like

10 guidelines or something of that nature, but I don't

11 recall specifically.

12 Q Got it. So there was no sort of

13 playbook on how to deal with a complaining customer.

14 It was --

15 A No.

16 (Whereupon CFTC Exhibit No. 125 w a s

17 marked for identification, MM.)

18 Q All right. I want to hand you

19 what I've marked as CFTC Exhibit 125. And, again,

20 please review it and when you've reviewed it to your

21 satisfaction, you can indicate that to me and we'll

22 talk about it.

23 MR. MAY: Okay.

24

Page 163

1 BY MR. BURDEN:

2 Q All right. Mr. Ruth, do you recognize

3 C F T C Exhibit 125?

4 A No.

5 Q All right. So jruth@longleaftrading.com

6 was your email address, correct?

7 A Yes.

8 Q All right. So who's Steve Beranek,

9 do you know?

10 A Steve Beranek was a customer of mine.

11 Q All right. So it looks like he's

12 sending you an email on October 29, 2016, and I'm

13 looking at the middle of Exhibit 125. Do you see

14 that?

15 A Yep.

16 Q All right. So Mr. Beranek writes,

17 "Your firm's business model is very impressive.

18 It looks like the commissions and fees for the

19 year will surpass my entire $20K in investments, and

20 I have only lost about 20 percent of my investment.

21 At this rate in ten years my account balance will

22 be zero and your firm will have made 200K. Steve."

23 Do you remember receiving this email?

24 A Now that I see it, yeah.

Page 164

1 Q Okay. So if you look at the next email

2 up, it looks like you forward this to Mr. Evans on

3 January 29, 2017, is that right?

4 A That's what it says, yep.

5 Q Do you remember doing that?

6 A I don't recall.

7 Q So what's written in the body of that

8 email is, "I just got a good laugh reading this

9 again." Did you write that?

10 A That's what it appears, that I did, yeah.

11 Q But do you remember writing it?

12 A No.

13 Q So, I'm sorry. I want to go back,

14 if I could, please, for one more quick question.

15 You can just pull it off the top of the pile, if you

16 would.

17 A Are we done with this one?

18 Q Yeah, you can put that one aside.

19 A I want to talk about this one now.

20 Q You do?

21 A I'm still getting a good laugh today.

22 Q Why? Tell me why.

23 A The guy's an RIA.

24 Q What does that mean?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 161 - 164

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 43 of 115 PageID #:2090
Page 165

1 A He's a -- what is it?

2 MR. MAY: Can I suggest --

3 MR. BURDEN: No.

4 Q Is it a registered investment advisor?

5 A Yeah, that's it.

6 MR. MAY: That's exactly what I was

7 going to say.

8 MR. BURDEN: I knew you'd have the

9 right answer.

10 A That's why I find it -- like he's

11 not complaining. I can't -- I don't know. He's

12 just -- I'm speculating here, but he's either being

13 very sarcastic or he was actually complimenting,

14 I guess, the business model. I don't know.

15 Q Did you talk to Mr. Beranek about that

16 email?

17 A No, never brought it up.

18 Q Did Mr. Beranek continue to trade at Long

19 Leaf Trading --

20 A I believe so.

21 Q -- after this email?

22 A That's the other thing I find -- yeah,

23 that's why I'm laughing.

24 Q Did he continue to lose money?

Page 166

1 A I'm not -- I don't know.

2 Q All right. So if you could put that

3 one aside.

4 A All right.

5 Q So I thought that one was funny too.

6 A Yeah.

7 Q Let's take a look at 124, if we could,

8 please.

9 A Sure.

10 Q Are you back on that?

11 A Yeah.

12 Q There we go. All right. So I want

13 to focus back in on this email from Rob Mixer

14 to jruth@longleaftrading.com. In this middle

15 paragraph in the last sentence Mr. Mixer appears

16 to write, "Even if you met the targeted 20 percent

17 return per year that we initially discussed, it

18 will be two plus years to recover."

19 Did you tell Mr. Mixer that he

20 could expect a return of 20 percent per year?

21 A No.

22 Q You could put that one aside.

23 A All right.

24

Page 167

1 (Whereupon CFTC Exhibit No. 126 w a s

2 marked for identification, MM.)

3 Q I want to hand you what I've marked

4 as CFTC Exhibit 126. Do you recognize this -- oh,

5 take a moment to review it, please, and then I'll

6 ask you questions about it.

7 MR. MAY: Ready?

8 THE WITNESS: Oh, yeah.

9 BY MR. BURDEN:

10 Q So, Mr. Ruth, do you recognize CFTC

11 Exhibit 126?

12 A Nope.

13 Q All right. Do you know who Joe Hermanson

14 is?

15 A I'm going to assume he's a client of mine.

16 Q Why do you think that?

17 A Because he's addressing the email to

18 me and he has an account number in his -- on the

19 attachment.

20 Q All right. So in Exhibit 126 i t

21 appears to reflect Mr. Hermanson writing to you

22 in June of 2017. And he says, "Jeremy," and there's

23 some weird little symbol that I think is a glitch,

24 "The reality of all this is finally hitting me as

Page 168

1 you've managed to take 13K and turn it into 5K.

2 I could have done that bad all by myself."

3 MR. MAY: Actually, I'm going to take

4 issue with some of -- I think you're making

5 corrections for some of the errors that are

6 on the document.

7 MR. BURDEN: So is that an objection,

8 Mr. May?

9 MR. MAY: It's an observation.

10 MR. BURDEN: All right. I'm going to

11 continue then.

12 MR. MAY: Well, we're going to make

13 this part of the exhibit and part of the

14 record, yes?

15 MR. BURDEN: It is part of the record,

16 correct --

17 MR. MAY: Wonderful.

18 MR. BURDEN: -- though you will not

19 have access to the record.

20 MR. MAY: Unless --

21 MR. BURDEN: Litigation --

22 MR. MAY: Right.

23 MR. BURDEN: -- proceeds.

24 MR. MAY: Okay. I knew the answer.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 165 - 168

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 44 of 115 PageID #:2091
Page 169

1 I just wanted him to hear that.

2 BY MR. BURDEN:

3 Q All right. So the email notes for

4 Mr. Hermanson, "I also noted that of the last four

5 positions you placed me in, I was not consulted.

6 You just did it. That said, can you see that

7 what is left here is sent back to Midland."

8 Is Mr. Hermanson correct here that

9 his account went from 13K to 5K?

10 A No clue. I don't recall.

11 Q All right. Did you follow up with

12 Mr. Hermanson about this email?

13 A I don't recall, but I would assume so

14 because you have to close down an account so ...

15 Q All right. Well, do you recall any

16 subsequent discussions or emails with Mr. Hermanson?

17 A No.

18 Q All right. So Mr. Hermanson complains

19 here that he was not consulted with respect to

20 four positions that he writes that he was placed

21 in. Do you know if that's correct? Was he put into

22 positions that he didn't provide consent for?

23 A I'm going to let you in on a little

24 secret. Every single time somebody loses money

Page 170

1 and there's a broker involved they start saying

2 and making up things. Every single time. I'm sure

3 you've figured that out by now, right?

4 Q I don't answer questions here.

5 A No, of course I wouldn't do it, but

6 I could see why you would think that. But in

7 my experiences being a commodity broker, when it

8 comes to the point where you're going to part ways

9 it always starts off with you promised me a return

10 of X amount of dollars, this, this and that, and

11 they totally, you know, misconstrue everything

12 that happened. So the answer is no, he wouldn't

13 be consulted -- of course he's consulted, but yeah.

14 Q Do you specifically remember consulting

15 Mr. Hermanson about the positions for June, May,

16 April and March of 2017?

17 A I can't specifically recall.

18 Q Would there be any written record

19 of Mr. Hermanson providing his consent for those

20 positions?

21 A Can't -- I don't recall how it was done.

22 Q You can put that one aside, if you would,

23 please.

24 A Oh, I didn't realize you provided the --

Page 171

1 MR. MAY: Statement?

2 THE WITNESS: Yeah.

3 A So, no, he didn't go to 5K. He went to

4 $5,189.72.

5 (Whereupon CFTC Exhibit No. 127 w a s

6 marked for identification, MM.)

7 Q All right. Mr. Ruth, I want to provide you

8 with a document that I've marked CFTC Exhibit 127.

9 Please look at it and tell me when you've looked at

10 it. I'll ask you some questions about it.

11 MR. MAY: Ready?

12 THE WITNESS: Yes.

13 BY MR. BURDEN:

14 Q All right. Mr. Ruth, do you recognize the

15 document marked as CFTC Exhibit 127?

16 A No.

17 Q All right. Do you know who Kurt Pfost is?

18 A After reading the document, yes.

19 Q Who is he?

20 A He is an original customer of Long Leaf

21 who then eventually became my customer, I believe.

22 Q And when did Mr. Pfost become your

23 customer, please.

24 A According to the document, Monday,

Page 172

1 April 3, 2017.

2 Q Why do you say that?

3 A Because that's what the document says.

4 Q So I'm afraid I didn't see that. Where

5 are you seeing that, please.

6 A On the third page effective today,

7 Monday, April 3, 2017, I wish to rescind my letter

8 of direction for futures trading. Let it be known

9 I wish to move into a broker style assisted service

10 and work with broker Jeremy Ruth of Long Leaf

11 Trading Group, Incorporated. You didn't read that?

12 It's right there.

13 Q I see that. That's good. So this

14 letter of direction, what did this give you the

15 ability to do?

16 A It isn't a letter of direction.

17 It is the rescinding of a letter of direction

18 that he had previously with a broker at the firm.

19 Q I see. And was that with Mr. Evans or

20 do you not know?

21 A I don't -- it could be Mr. Evans or Tony

22 Klancic or both.

23 Q Let's put that one aside, please.

24 A I never had any letter of direction

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 169 - 172

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 45 of 115 PageID #:2092
Page 173

1 accounts.

2 (Whereupon CFTC Exhibit No. 128 w a s

3 marked for identification, MM.)

4 Q All right. I want to hand you what

5 I've marked as CFTC Exhibit 128. Again, take

6 a look at it, please, and let me know when you've

7 looked at it.

8 MR. MAY: Ready.

9 THE WITNESS: One second.

10 BY MR. BURDEN:

11 Q Ready to go?

12 A Yeah.

13 Q So, Mr. Ruth, do you recognize CFTC

14 Exhibit 128?

15 A No.

16 Q Who's Shane Allen?

17 A Shane Allen was a customer of mine.

18 Q All right. Do you see in Exhibit 128

19 it reflects an email from Shane Allen --

20 A Well, correction. Shane Allen was

21 a customer of Tony Klancic. After Tony Klancic

22 left, he became a customer of mine.

23 Q Got it. And when did Tony Klancic leave,

24 please.

Page 174

1 A I don't know. But my point is I wasn't

2 involved in the solicitation of him.

3 Q All right. So let's stay on Exhibit 128,

4 if we could, please. So Mr. Allen writes to you

5 in May of 2017, "This is a written notification to

6 cancel all future orders based on performance over

7 the past year and a half," and then he requests

8 termination of his account. Do you recall receiving

9 this email?

10 A No.

11 Q Do you know how Mr. Allen's account

12 did at Long Leaf Trading?

13 A No clue.

14 Q All right. Let's put that one aside,

15 please.

16 A (Witness complies).

17 (Whereupon CFTC Exhibit No. 129 w a s

18 marked for identification, MM.)

19 Q All right. I want to hand you what

20 I've marked as CFTC Exhibit 129. Look it over,

21 please, and let me know when you're ready.

22 MR. MAY: Ready?

23 THE WITNESS: Yes.

24

Page 175

1 BY MR. BURDEN:

2 Q All right. Mr. Ruth, do you recognize

3 Exhibit 129?

4 A No.

5 Q All right. Who is Dan Snyder?

6 A It appears he is a client of mine.

7 Q Why do you think that?

8 A Because he is writing an email to me

9 talking about his account performance.

10 Q All right. And what's he saying about

11 his account performance?

12 A It says, "Based on the recent account

13 statements, the balance has reduced from 25099 to

14 19131, a 24 percent reduction in three months."

15 Q Do you know if what Mr. Snyder is writing

16 there is correct? Did he lose 24 percent of his

17 account in three months?

18 A I have no clue.

19 Q All right. So if you look at the

20 last sentence of -- I guess the first paragraph

21 of Mr. Snyder's email to you he says, "When we

22 have gains, they are not maximum gains. Yet every

23 loss has been a maximum loss. I am afraid I don't

24 see the value in your option selection process."

Page 176

1 Do you know if that's right for

2 Mr. Snyder, for Mr. Snyder's trading at Long Leaf?

3 Was every loss a maximum loss?

4 A I would not recall that.

5 Q For your clients at Long Leaf Trading

6 generally is this true? Were the maximum losses

7 realized and the gains sort of much less than the

8 maximum gains?

9 A I don't know.

10 Q All right. So it looks here like you're

11 responding to Mr. Snyder. You write, "My apologies.

12 I didn't realize you were waiting on comments from

13 me. I'll call you on Monday to discuss." Did you

14 write that?

15 A I don't know.

16 Q Do you recall having any discussions

17 with Mr. Snyder about his account?

18 A No.

19 Q All right. So --

20 A I don't even remember who that guy is.

21 Q I'm sorry?

22 A I don't even remember who he is.

23 Q All right. So --

24 A Like generally I could tell you

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 173 - 176

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 46 of 115 PageID #:2093
Page 177

1 something about each client, but I've got nothing

2 on that one.

3 (Whereupon CFTC Exhibit No. 130 w a s

4 marked for identification, MM.)

5 Q Okay. Well, let me hand you what

6 I've marked as CFTC Exhibit 130. And look at it,

7 please, and tell me when you're ready to talk about

8 it.

9 A All right.

10 MR. BURDEN: Shall we proceed?

11 MR. MAY: Sure.

12 BY MR. BURDEN:

13 Q Yeah, all right. Mr. Ruth, do you

14 recognize CFTC Exhibit 130?

15 A Nope.

16 Q All right. Who is David Thibert?

17 A I'm going to assume he's a client of mine.

18 Q Why do you think that?

19 A Because he is using Gain Capital support

20 to try to contact me.

21 Q All right. And did you ever get in touch

22 with Mr. Thibert?

23 A I would assume so.

24 Q So why do you think that?

Page 178

1 A Because I don't avoid anybody's phone

2 calls and I work more hours than anybody in the

3 industry.

4 Q So, yeah, so that's my question right

5 there. So if you look at the first email in the

6 chain in Exhibit 130, it reflects a message from

7 GFSupport@gaincapital, and it looks like they're

8 forwarding an email from Mr. Thibert. Is that what

9 you understand that to mean?

10 A Yeah.

11 Q And Mr. Thibert writes, "I want my

12 funds frozen until I can contact Mr. Ruth. He

13 seems to be avoiding me. Do not trade any more

14 options until they are discussed with me." And it

15 looks like ultimately this gets sent to Mr. Evans,

16 who forwards it to you, is that correct?

17 A Yeah.

18 Q All right. So did you talk to Mr. Evans

19 about this at all?

20 A I would assume so.

21 Q Well, do you remember talking to Mr. Evans

22 about it?

23 A I mean, not specifically. But I think this

24 guy was calling the wrong phone number or something

Page 179

1 of that nature.

2 Q Why do you think that?

3 A Because the fact that he was calling --

4 if I remember correctly, he was calling -- if you

5 go back to Exhibit 120, I think he was calling like

6 that phone number (indicating), which is Gain

7 Capital, trying to find Jeremy Ruth.

8 Q So why do you think -- I'm not

9 disagreeing with you, but why do you think he

10 was doing that?

11 A I think the guy's older and he's not

12 technologically savvy.

13 Q But did anybody tell you that? Did you

14 come to find that out --

15 A Yeah, through this email, yeah.

16 Q Okay. So where does the email say that?

17 A Well, once I got on the phone with

18 him I'm like, hey, I haven't -- I haven't received

19 a call from you. I got this email. What's going

20 on.

21 Q But is that a discussion you had with

22 Mr. Thibert?

23 A I don't remember the exact, specific

24 thing, what I said or whatever, but I know that

Page 180

1 that was the nature of what the issue was.

2 Q Got it. So you remember calling

3 Mr. Thibert --

4 A Yeah, this isn't an instance of me

5 like avoiding somebody's phone call or anything.

6 Q Got it. So your testimony is you

7 received this email and you did get in touch with

8 Mr. Thibert --

9 A Yes.

10 Q -- correct?

11 A I never -- and my testimony also

12 is is that I never avoided his phone call in the

13 first place.

14 Q Got it. And you learned from Mr. Thibert

15 that he was calling the wrong number?

16 A Yes, or something of that nature.

17 Q That's your recollection?

18 A Yes.

19 Q All right. Let's put that one aside.

20 A (Witness complies).

21 (Whereupon CFTC Exhibit No. 131 w a s

22 marked for identification, MM.)

23 Q All right. I want to hand you what

24 I've marked as CFTC Exhibit 131. Take a look at

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 177 - 180

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 47 of 115 PageID #:2094
Page 181

1 it, please, and indicate for me when you have

2 reviewed it.

3 MR. MAY: Are you ready?

4 THE WITNESS: Yes.

5 BY MR. BURDEN:

6 Q All right. Mr. Ruth, do you recognize

7 C F T C Exhibit 131?

8 A No.

9 Q Who's Suzanne Clemons?

10 A I don't know exactly. I don't recall.

11 Q All right. Was Ms. Clemons a customer

12 of yours?

13 A To be honest with you, I don't know

14 if I have the right person, but there's one --

15 either she is but we never did any trades

16 together or -- or, sorry, maybe she was like

17 a client of somebody else's that was given to me.

18 I don't know if we did any trades. There's one

19 that's like that.

20 Q Is that Suzanne Clemons?

21 A I can't remember. I mean, I only had

22 like a few females. So I think -- I don't know.

23 I don't know if it's her but ...

24 Q Okay. Well, let's take a look at 131

Page 182

1 anyway.

2 A Yeah.

3 Q So the email reflects -- or Exhibit 131

4 reflects an email from a Suzanne Clemons to your

5 email address at Long Leaf when you were there,

6 is that right?

7 A Yeah.

8 Q All right. And Ms. Clemons writes,

9 "Jeremy, please close out all positions by

10 August 11th and return funds to me on or before

11 August 18th. I am very disappointed in your claims

12 to generate positive returns." Do you recall any

13 discussions with Ms. Clemons?

14 A No.

15 Q All right. So do you know if you

16 followed up with Ms. Clemons from this email?

17 A I would assume so.

18 Q Do you have any recollection of following

19 up with Ms. Clemons?

20 A No.

21 Q All right. Did you represent

22 to Ms. Clemons that Long Leaf Trading generated

23 positive returns for customers?

24 A Nope.

Page 183

1 Q Did you represent that to any other

2 customers of Long Leaf Trading?

3 A Nope.

4 Q All right.

5 MR. MAY: Can I ask him one question?

6 MR. BURDEN: You know, if you want to,

7 I don't mind. We usually provide opportunity

8 at the end.

9 MR. MAY: At the end, yeah. It's really

10 just one question.

11 MR. BURDEN: Sure, go right ahead.

12 MR. MAY: Yeah. Directing your

13 attention to Exhibit 131, do you see an

14 email that indicates that you sent an email

15 on or about June 29, 2017 at 3:39 p.m.?

16 THE WITNESS: Yeah, I see that.

17 MR. MAY: Could you tell me from looking

18 a t Exhibit 131 who the email was sent to in the

19 middle of the page?

20 THE WITNESS: No one.

21 MR. MAY: Why do you say that?

22 THE WITNESS: Because it doesn't have

23 anybody on the To line.

24 MR. MAY: So you couldn't tell looking

Page 184

1 a t Exhibit 131 who the recipient of that

2 email is?

3 THE WITNESS: Correct.

4 MR. MAY: Okay. Thanks for indulging me.

5 MR. BURDEN: Of course.

6 A Just going back --

7 Q Yeah.

8 A -- I think the last question you asked

9 me, can you repeat that?

10 MR. BURDEN: Mary, if you would, please.

11 (Whereupon the portion of the record

12 was read as requested.)

13 A Yeah. I'd like the record to reflect

14 that my answer to the last question is I don't

15 recall.

16 (Whereupon CFTC Exhibit No. 132

17 was marked for identification, MM.)

18 Q Okay. Let me hand you what I've marked

19 as CFTC Exhibit 132. Take a look at Exhibit 132,

20 please, and tell me when you've looked at it.

21 MR. MAY: Ready?

22 THE WITNESS: Yes.

23 BY MR. BURDEN:

24 Q All right. Mr. Ruth, do you recognize

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 181 - 184

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 48 of 115 PageID #:2095
Page 185

1 C F T C Exhibit 132?

2 A Nope.

3 Q All right. Do you know who Karl Reimer is?

4 A Yes.

5 Q Who's that, please.

6 A He was originally a customer of Vince

7 Prieto's, and then after Vince Prieto left he became

8 a customer of mine.

9 Q All right. When did he become a customer

10 of yours, please.

11 A I don't know the exact date.

12 Q All right. So Exhibit 132 a p p e a r s

13 to reflect an email from Mr. Reimer to you dated

14 August 28, 2017.

15 A I didn't work at Long Leaf Trading

16 Group then.

17 Q In August 28th of 2017?

18 A Correct.

19 Q Yeah. So it looks from the email like

20 jruth@longleaftrading.com forwarded this to --

21 A Yeah, Tim Evans forwarded it to James

22 Leeney after I left.

23 Q Got it. So you can put that one aside,

24 please.

Page 186

1 A Which means that Tim Evans has access

2 to my email account and sends things on my behalf.

3 Q Did Mr. Evans ever do that while you

4 were at Long Leaf?

5 A Yes.

6 Q When?

7 A I don't know specifically but --

8 Q Well, can you think of any instances

9 of Mr. Evans sending things under your --

10 A Not false --

11 Q You've got to let me finish.

12 MR. MAY: Yeah, because you can't answer

13 his question --

14 THE WITNESS: I'm sorry, I'm sorry,

15 I'm sorry.

16 MR. MAY: -- if you don't know the

17 question.

18 BY MR. BURDEN:

19 Q While you were at Long Leaf Trading

20 did Mr. Evans send emails from your email address?

21 A I have reason to believe, yes.

22 Q Why do you think that?

23 A Because I've seen emails that are being

24 sent that I didn't send.

Page 187

1 Q All right. And when did you see those

2 emails, please.

3 A Throughout my tenure at Long Leaf Trading

4 Group.

5 Q Okay. Can you give me an example of

6 some of them?

7 A I don't -- haven't thought about it or

8 looked at them in years.

9 Q Well, did you ever talk to --

10 A Actually, I can give you an example.

11 Right here (indicating).

12 Q Yeah. So what email are you holding

13 up there, Mr. Ruth? What exhibit was that, please.

14 A Exhibit 132.

15 Q All right. So you testified that that

16 was after you had left, right?

17 A Yes, I left the Friday before.

18 Q All right. So what I'm interested

19 in is learning about emails that Mr. Evans may

20 have sent --

21 A Like I said, I don't recall.

22 MR. MAY: Okay. Let him finish asking

23 the question to make sure that you actually

24 don't recall, okay?

Page 188

1 THE WITNESS: Okay.

2 BY MR. BURDEN:

3 Q All right. So, Mr. Ruth, did

4 Mr. Evans send emails from your address while

5 you were at Long Leaf Trading?

6 A I have reason to believe that he did.

7 Q Why do you think that?

8 A Because he did it after I left, and

9 I have seen emails that have been generated from

10 my account that I don't recall sending.

11 Q When did you see those emails?

12 A Some of them today. Some of them two,

13 three years ago.

14 Q All right. Well, what emails did

15 you see today that you don't think you wrote?

16 A The reason why I don't think I wrote

17 them is because I don't recall them. This one.

18 Q And what exhibit is that, please, Mr. Ruth.

19 A 119.

20 Q Very good.

21 A This one I don't recall writing.

22 Q And what exhibit is that, please.

23 A 122. That's -- those are the ones

24 I have seen today that I don't recall sending.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 185 - 188

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 49 of 115 PageID #:2096
Page 189

1 Q Okay. So you don't recall sending

2 them, but why do you think that Mr. Evans sent

3 them, if that's what you think?

4 A My gut. That's it.

5 Q Sorry?

6 A My gut tells me that he did.

7 Q But why do you think that? What's your

8 basis for saying that?

9 A I feel like I've already answered that

10 question.

11 Q Well, indulge me and do it again

12 because I'm not sure why you think Mr. Evans

13 sent those two emails other than the fact that you

14 don't remember sending them. I'm not disagreeing

15 with you. I just want to know why you think

16 Mr. Evans sent them.

17 A Because I don't recall sending them.

18 He has access to my email. He's the only one

19 that has access to my email that I know of besides

20 myself, and I have information that shows that he

21 sent emails from my account. So one reasonable

22 person would believe that that is a possibility.

23 Q Do you have any other reasons to believe

24 that that's a possibility?

Page 190

1 A I think that's more than a reasonable

2 reason to believe.

3 Q I'm not disagreeing with you, but I want

4 to know are there other reasons?

5 A Not that I can think of at this time.

6 Q Did you ever confront Mr. Evans at

7 any time about writing emails, you know, from your

8 email address or on your behalf?

9 A Not that I recall.

10 Q All right. So if I wanted to find

11 like a written record of that or you emailing

12 Mr. Evans and saying don't do this anymore, would

13 I find anything like that?

14 A I don't -- possibly. I don't know.

15 Q Do you recall sending any emails

16 to Mr. Evans about suspicions you had that he was

17 sending emails on your behalf?

18 A No. I probably wouldn't have

19 a conversation like that over email.

20 Q How would you have that type of

21 conversation?

22 A In person.

23 Q Do you recall any such conversations?

24 A Not -- I don't recall.

Page 191

1 MR. BURDEN: All right. I'll tell

2 you what. Do you guys want to take a little

3 break?

4 MR. MAY: Yeah.

5 MR. BURDEN: Okay.

6 MR. MAY: Just wondering if this is the

7 opportunity for me to go back to my office and

8 get my notebook or not.

9 MR. BURDEN: Oh, man. How long do you

10 think that'll take?

11 MR. MAY: Round trip, ten minutes.

12 MR. BURDEN: Yeah, go ahead. That's

13 fine -- or, I mean, you can have somebody

14 bring it over.

15 MR. MAY: Well, I don't know how clean

16 or messy my office really is.

17 MR. BURDEN: All right. Go, go, go.

18 I'll see you guys in ten minutes.

19 (Whereupon a recess was taken from

20 3:30 p.m., to 3:55 p.m., after which

21 the following proceedings were had:)

22 Q All right. Mr. Ruth, are you aware

23 that your outgoing calls at Long Leaf Trading were

24 recorded by their CRM?

Page 192

1 A No.

2 Q You didn't know that?

3 A I don't think all of them were recorded.

4 Q Yeah. I think it's just the outgoing

5 sort of sales calls to customers when you dial

6 electronically, is that right?

7 A I don't know the exact details,

8 but I know that it's an unreliable system and

9 it's not -- there's not a lot of -- there's less

10 recordings than there are recordings.

11 Q What do you mean by that?

12 A Like if you were to try to find

13 like recordings of clients, you would find more --

14 you'd have more instances of not being able to find

15 the recording than you could find the recording.

16 Q Got it. So why do you think that?

17 A Because it's a poorly designed system.

18 Q Well, like did you ever try to get

19 a customer call and you couldn't find it or --

20 A Yeah, yeah, all the time.

21 Q All right. So you knew the calls were

22 recorded and you could look them up if you wanted

23 to, right?

24 A Correct. But I think the point I'm

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 189 - 192

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 50 of 115 PageID #:2097
Page 193

1 trying to make here is is that a majority of the

2 calls are not recorded.

3 Q Got it.

4 A Or they're not library'd or indexed

5 or something of that -- stored properly. I don't

6 know what the answer is.

7 Q Okay. Well, Long Leaf Trading

8 produced the calls that were recorded to us.

9 And so I'm going to show you a couple of them --

10 A Okay.

11 Q -- not too many, and we'll see how we do.

12 MR. BURDEN: All right. I want to show

13 you an audio recording. I'm marking it for the

14 record as CFTC Exhibit 133.

15 (Whereupon CFTC Exhibit No. 133 was

16 marked for identification, MM.)

17 MR. BURDEN: So this is an audio file

18 produced by Long Leaf Trading and the name of

19 the file is 07-06-2017_JJKUMPEL_3609415560_(1).

20 And the date on this call is, according to the

21 file, is July 6th of 2017.

22 Q Is that name familiar to you, Kumpel?

23 MR. MAY: What was the name of the

24 exhibit again?

Page 194

1 MR. BURDEN: 133.

2 A Is what familiar with me?

3 Q The name Kumpel, K-u-m-p-e-l.

4 A No.

5 Q All right. So let's listen to some of

6 this call, if we could.

7 MR. MAY: Is this the entire call?

8 MR. BURDEN: No, I'm going to be playing

9 excerpts from the call.

10 MR. MAY: Okay.

11 MR. BURDEN: The entire call is 103 minutes

12 long. Bear with me and we'll see if I can get

13 this to work. It does not always work on the

14 first try. All right. So I want to start us

15 off in Exhibit 133 at 43 minutes and 52 seconds.

16 THE WITNESS: Do we know the first name

17 of this person?

18 MR. BURDEN: I don't off the top of my

19 head, no.

20 MR. MAY: The file is J-J-K-U-M-P-E-L,

21 so my hypothesis is it starts with a J.

22 (Whereupon the audio was played.)

23 MR. BURDEN: All right. So I'm going

24 to stop it there at 46 minutes and 31 seconds.

Page 195

1 Q So, Mr. Ruth, is that your voice on the

2 call?

3 A I believe so.

4 Q All right. So I want to ask you

5 about this bit we heard you talking about, that

6 you told Mr. Kumpel something to the effect that --

7 A Hold on. Sorry, go ahead.

8 Q What were you going to say?

9 A I don't know that the guy's name is

10 Mr. Kumpel.

11 Q Okay. Well, whoever you were talking

12 to on the call, it sounds like you're telling this

13 person -- you say something to the effect of it's

14 easy to accomplish 12 percent on an annual basis.

15 So that's approximately what you said on the call,

16 correct?

17 A No.

18 Q What did you say on the call?

19 A I'm talking about a hypothetical

20 situation in which the specific example that's

21 in front of him, the person got a 6 percent return.

22 And then like I'm showing him through another visual

23 that if you were to add another contract, it's

24 scaleable so it would move him to a 12 percent

Page 196

1 return, but I'm not referring to him. I'm referring

2 to a hypothetical situation.

3 Q Got it. So were there any customers

4 of yours at Long Leaf that obtained a 6 percent

5 annual return?

6 A Couldn't tell you.

7 Q Any customers of yours at Long Leaf that

8 obtained a 12 percent annual return?

9 A I don't -- I mean, not only could

10 I not tell you, but I don't understand how that's

11 applicable to the situation. I think you're

12 misunderstanding what I just said in that statement,

13 that it's a hypothetical situation that has nothing

14 to do with them.

15 Q No, I understand.

16 A Then why would you ask that question?

17 Q I don't answer your questions about

18 my questions, Mr. Ruth. I ask you questions and

19 you answer them.

20 MR. MAY: I could come up with a theory,

21 but I'd rather not.

22 MR. BURDEN: Not unless you want to

23 testify. All right. So I want to restart

24 Exhibit 133. And let's start it, if we could,

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 193 - 196

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 51 of 115 PageID #:2098
Page 197

1 at 50 minutes and 37 seconds. So here we go.

2 (Whereupon the audio was played.)

3 MR. BURDEN: All right. So I'm going

4 to stop it there at 55:23.

5 Q And there's two statements I want to

6 focus in on, Mr. Ruth. So the first is I think

7 we heard you say a couple times in there that --

8 something to the effect of we're very good at what

9 we do or we're successful. Did you say that on the

10 call?

11 A I don't know. It was a long segment there.

12 I don't necessarily recall.

13 Q All right. So I think we can play

14 it back if you wanted to. Would you like me to?

15 A No.

16 Q All right. So you remember telling

17 this person that --

18 A No.

19 Q -- from listening to the call --

20 MR. MAY: Okay. You can't answer his

21 question before he's done asking it, okay?

22 MR. BURDEN: So thanks.

23 Q So, Mr. Ruth, what basis do you have

24 for telling this customer that Long Leaf Trading

Page 198

1 is successful or good at what we do?

2 A I think you misconstrued what I just

3 said on that phone call.

4 Q Okay. Well, set me straight.

5 A I'm telling him that basically if

6 I were to cherry -- I could make this compelling

7 case that I am very good at what I do because I

8 could cherry pick which trades I want to share with

9 him and share those trades and be like, oh, I've

10 got a winning trade. The point I'm trying to make

11 is is that I don't want you to sign up for this

12 program because of that because it's not going to

13 be indicative of what is going to actually happen

14 in your account.

15 Q Was Long Leaf Trading successful?

16 Was Long Leaf Trading --

17 A Long Leaf Trading --

18 Q You've got to wait until I finish,

19 remember? Remember my tip. It's good to take

20 a breath when I finish the question.

21 MR. MAY: There was a little pause.

22 MR. BURDEN: I'm sorry?

23 MR. MAY: There was a little bit of

24 a pause in your question. I thought you were

Page 199

1 done too.

2 MR. BURDEN: Oh, all right. Well, that's

3 okay. I'm not mad about it.

4 Q So, Mr. Ruth, was Long Leaf Trading

5 successful for customers? Were they good at what

6 they did?

7 A Long Leaf Trading had moments of

8 success. Just like a baseball player, a baseball

9 player goes up 500 times a season and they get

10 three -- you know, one-third of the time they get

11 a hit or less. That's how we are.

12 Q All right. Was Long Leaf Trading --

13 MR. MAY: Are you saying --

14 A I'm saying --

15 MR. MAY: -- one out of three?

16 A -- the way you define success, which

17 is this -- kind of all day we've been battling

18 over it is you look at the end result, okay? I

19 don't look at the end result. I look at it as did

20 I have a successful trade -- or I should say did Tim

21 Evans have a successful trade. And if the answer

22 is yes, then I consider that a success. So if you

23 were to ask me like -- I know what you're getting

24 at here, is am I representing to this guy that we

Page 200

1 do have moments of success. Yes, we do have moments

2 of success. Am I representing to him that every

3 single client that we take on has a winning account?

4 No, I'm not saying that, nor would I say that.

5 BY MR. BURDEN:

6 Q Right. But we heard you say on

7 the call that Long Leaf Trading had success for

8 clients --

9 A We did.

10 Q -- and we've also heard you say on

11 the call that Long Leaf Trading is very good at

12 what they do.

13 A Yeah.

14 Q And I guess what I'm asking is, is that

15 true?

16 A Yes.

17 Q All right. What's your basis for saying

18 that?

19 A Going back to Exhibit 123, that's better

20 than you can do it.

21 Q And Exhibit 123 reflects 50 percent winners

22 and 50 percent losers, correct?

23 A I don't know if that's accurate, but sure.

24 Q Well, you're the one that --

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 197 - 200

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 52 of 115 PageID #:2099
Page 201

1 MR. MAY: You can't agree with it if you

2 don't know if it's accurate.

3 A Sure, yes.

4 BY MR. BURDEN:

5 Q All right. Well, I'll tell you what.

6 We heard you say on the call as well that over

7 the course of 48 trades, Long Leaf Trading is

8 going to be profitable for the customer. That's

9 substantially what you said, correct?

10 A I'm sorry. What?

11 Q What you said on the call to this

12 customer, prospective customer is that over the

13 course of 48 trades you'll get your specifically

14 targeted return.

15 A That's not what I said.

16 Q What did you say?

17 A I said that -- I don't think we even

18 listened to that portion.

19 Q Sure, we did. Do you want me to play it

20 back again?

21 A Sure.

22 Q All right.

23 MR. MAY: Could you tell us when

24 you're starting and when you're ending?

Page 202

1 MR. BURDEN: What do you mean?

2 MR. MAY: In the tape. You said it's

3 103 minutes long.

4 MR. BURDEN: Yeah, I have been and will --

5 MR. MAY: I know, yeah.

6 MR. BURDEN: -- continue to do so.

7 MR. MAY: Okay.

8 MR. BURDEN: All right. So I'm going to

9 start this at 54:22.

10 (Whereupon the audio was played.)

11 MR. BURDEN: All right. So that's

12 where I want to stop it to revisit the piece

13 I'm talking about. So I just stopped it at

14 55:06.

15 Q So it sounds like you're saying on the

16 call, Mr. Ruth, that over the course of 48 trades,

17 we're going to be profitable. Am I getting that

18 right --

19 A Nope.

20 Q -- or what are you saying there?

21 A You're -- that question you're asking,

22 you're asking it based off a different part of that

23 phone call, which is not the recording that you're

24 providing right now. So I can't answer your

Page 203

1 question.

2 Q All right.

3 A But, no, I did not say that, nor does

4 that recording say that.

5 MR. BURDEN: All right. I'll tell

6 you what. Let's keep listening. I'm going

7 to start this at 1:09:44, and hopefully it

8 won't go on for too long.

9 MR. MAY: 1:09:44?

10 MR. BURDEN: You got it.

11 THE WITNESS: I thought it was 105 minutes.

12 MR. MAY: I thought it was 103 minutes.

13 MR. BURDEN: Oh, it's 143 minutes

14 and 28 seconds. I was looking at the wrong

15 thing.

16 MR. MAY: 143 minutes and 28 seconds?

17 MR. BURDEN: Yes, these are long calls.

18 All right. So I'm starting this at 1:09:44.

19 (Whereupon the audio was played.)

20 MR. BURDEN: So I want to stop it there

21 at 1:12:17.

22 Q I let it go on for a bit long. I

23 didn't write down where it started, like I should

24 have done, but it's the bit at the end I want to

Page 204

1 talk about.

2 A I'd love to talk about it.

3 Q So, Mr. Ruth, at the end of this it

4 sounds like you're saying something to the effect

5 that if you do what we need to do, then 76.5 percent

6 of the time you'll get your targeted return.

7 Did I get that right?

8 A No, that's incorrect. That's not what

9 it says.

10 Q All right. So what did you say?

11 A I said that in the event that

12 76.5 percent of options expire worthless and we

13 stay consistent with the amount of premium that

14 comes in and then obviously the amount of premium

15 that comes out, like meaning we're not changing

16 up the risk tolerance and things of that nature

17 and 76.5 percent of the options expire worthless,

18 I'm very confident that we would hit your

19 specifically targeted return.

20 Q Got it. So how many of your customers

21 achieved their specifically targeted return over

22 the course of their own investment with Long Leaf?

23 A Again, I look at things on a monthly

24 basis. So you can't -- I don't know. I don't have

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 201 - 204

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 53 of 115 PageID #:2100
Page 205

1 that information.

2 Q Okay. So I think we heard you say

3 there that -- something to the effect that you are

4 confident that, and I'm paraphrasing here, over time

5 you would achieve the client's specifically targeted

6 return. Did I get --

7 A That's not at all what that said.

8 Q All right. So what did you say?

9 A Again, I said that in the event

10 that 76.5 percent of options expire worthless

11 and we don't change anything in terms of the number

12 of contracts we're doing or the premium, the risk

13 to reward, I'm very confident that we would hit

14 your specifically targeted return.

15 Q So my question then is what is the

16 basis for that confidence? Like why did you tell

17 this guy --

18 A Because if you win 75 percent of

19 your trades and the amount of premium that you

20 collect is constant, then you would have a profit --

21 you would be profitable.

22 Q All right. Did that happen for

23 any of your clients while you were at Long Leaf?

24 A It did at times, yes.

Page 206

1 Q All right. For whom?

2 A I don't know. I don't know specifically.

3 Q And did that hold true over the life of

4 their accounts?

5 A I don't -- I don't know specifically.

6 MR. BURDEN: All right. So I want to pick

7 up Exhibit 133 at 1:17:36.

8 (Whereupon the audio was played.)

9 MR. BURDEN: All right. So I want to

10 stop it there. I'm stopping it at 1:43:28.

11 Q So, Mr. Ruth --

12 MR. MAY: I'm sorry. 1:43 --

13 MR. BURDEN: 28.

14 MR. MAY: You started at 1:17:36? That

15 can't be right. We didn't -- that's like a

16 minute maybe of playing the conversation.

17 MR. BURDEN: Oh, very good. Thanks,

18 guys. All right. So I'm reading the wrong

19 thing. There's a bunch of numbers up here.

20 So we did start --

21 MR. MAY: Do you want me to come over

22 and help you?

23 MR. BURDEN: Thank you. You know

24 what, if you're familiar with Nexidia,

Page 207

1 I'd be tremendously grateful for your help.

2 Are you familiar with Nexidia?

3 MR. MAY: I don't have to answer questions

4 either.

5 MR. BURDEN: Very good. All right.

6 THE WITNESS: Got him.

7 MR. BURDEN: So 1:17:36 is where we

8 started and where we finished was 1:18:35.

9 Q All right. So now that we've got that

10 straight. So, Mr. Ruth, we heard you talk on this

11 call I think and say to this client something to

12 the effect that if our clients weren't making money,

13 we wouldn't be in business, is that right? Did you

14 say that?

15 A I don't think so.

16 Q All right. Do you want to listen

17 to it again or do you want to kind of correct me

18 and tell me what you did say?

19 A I don't have -- sure, let's listen

20 to it again.

21 MR. BURDEN: All right. So I'm going

22 to start at 1:17:36.

23 (Whereupon the audio was played.)

24 MR. BURDEN: And then I stopped it again

Page 208

1 at 1:18:35.

2 Q All right. So, Mr. Ruth, it sounds

3 like you're saying to this person, you know, if

4 clients weren't making money, they wouldn't make

5 it to Month 11. If they didn't make it to Month 11,

6 or whatever month you said on the call, Long Leaf

7 Trading wouldn't be in business. So have I got that

8 basically right?

9 A Yeah, but that's not what you said earlier.

10 Q Okay. That's all right. I've got it right

11 this time, right?

12 A Yeah.

13 Q Okay. So what's your basis for saying

14 that clients at Long Leaf were making money?

15 A Again, I analyze things on a monthly

16 basis, so there are some months that they make

17 money. There are some months that they don't make

18 money.

19 Q But overall --

20 A I don't look --

21 MR. MAY: Okay. He didn't finish his

22 question, so you can't answer it.

23 A Like can you get this concept, that

24 I don't -- you and I look at this completely

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 205 - 208

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 54 of 115 PageID #:2101
Page 209

1 different?

2 BY MR. BURDEN:

3 Q Overall -- so rather than say overall,

4 isn't it true that during your tenure at Long Leaf

5 clients lost more money on more months than they

6 made money?

7 A I can't say that.

8 Q And wouldn't it be fair to say that

9 during your tenure at Long Leaf, clients lost more

10 money than they made in total?

11 A I couldn't speak to that at all. I don't

12 know that.

13 FURTHER EXAMINATION

14 BY MR. PATRICK:

15 Q Do you know what you meant when you

16 said in the recording that we just listened to

17 if we don't get to Month 11, we don't make money?

18 Do you remember that?

19 A Yeah, we're a business.

20 Q Right.

21 A That requires money to operate a business,

22 and it takes -- we have to make a certain amount of

23 money on a client in order for our business to be

24 profitable.

Page 210

1 MS. STREIT: But that's not dependent

2 on whether the client is profitable or not,

3 is it?

4 A Well, yeah, because the client

5 isn't -- if a client goes five months in a row

6 without winning, they're probably not going to be

7 like, yeah, I approve the trades for the next month.

8 Do you get what I'm saying? So like let's say you

9 go one month. You lose money, okay? It's a bad

10 month. It's going to happen. Then the next month

11 you make money. You're like all right, well, let's

12 go ahead the next month. Then the next month you

13 lose money, and then like you keep going like that.

14 So the profitability of the account -- that's why

15 you guys keep looking at the end result, but you

16 have to understand the journey that went through

17 there of why somebody would logically stay -- I

18 think my average account stays like 13 months. You

19 guys probably figured that out. If not, somewhere

20 around there. So why -- if everybody loses money,

21 why would they stay 13 months when they get to

22 approve the trades is what I'm trying to say. And

23 if they lost every single month, nobody would do

24 that. Plus, they wouldn't even be able to have

Page 211

1 the account capital required to be able to do

2 these trades if they lost five months in a row.

3 So what I'm saying is is that no sane person is

4 going to say yes to these four trades when all you

5 do is call them and say, hey, Mr. Customer, you lost

6 money this month.

7 BY MR. PATRICK:

8 Q Is there something significant about

9 Month 11? Is that like a breakeven point? I'm

10 just trying to -- I'm really trying to get at what

11 the significance of Month 11 is in that statement,

12 if we don't get to Month 11, we don't make money.

13 A It was represented to me that if

14 you take the expenses of Long Leaf Trading Group,

15 somewhere -- it costs like $20,000 a client to

16 operate it. And so I look at it as somewhere

17 around Month 11 is when we generally generate around

18 like $20,000 in commissions. So that's why Month 11

19 is significant.

20 FURTHER EXAMINATION

21 BY MR. BURDEN:

22 Q So who told you that, Mr. Ruth?

23 A Tim Evans.

24 MR. MAY: So you didn't pick Month 11

Page 212

1 out of a hat?

2 THE WITNESS: No.

3 A And just for the record, to like --

4 I'm not saying that because you bring on a client,

5 you're automatically like 20 grand in the hole.

6 It's like if you factor in like the cost of offices

7 and attorneys and audits and just the cost of doing

8 business for an IB and if you were to divide it by

9 the amount of clients we have, that's where we came

10 up with that number.

11 MR. MAY: Don't forget about phones.

12 You need those.

13 THE WITNESS: Oh, yeah, phones.

14 BY MR. BURDEN:

15 Q Well, I'll tell you what. I want to

16 do one more piece from Exhibit 133, and then we'll

17 move on to another call.

18 MR. BURDEN: So I'm going to restart

19 Exhibit 133 at 1:37:51.

20 (Whereupon the audio was played.)

21 MR. BURDEN: So I want to stop there

22 and we'll restart it. I'm stopping it at

23 1:38:54.

24 Q So I think we heard you telling this

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 209 - 212

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 55 of 115 PageID #:2102
Page 213

1 person on the call that you're very confident you

2 can do well for them, is that right?

3 A Yes.

4 Q All right. So what was the basis for

5 that confidence?

6 A I take pride in my job, and I was

7 confident about the outlook of Long Leaf Trading

8 Group.

9 Q All right. So, you know, it seems

10 here like you have been able to testify, to tell

11 us whether your customers made or lost money over

12 the life of their accounts, is that right?

13 MR. MAY: I'm going to object. That

14 misstates the testimony.

15 MR. BURDEN: Well, I'm asking if that

16 is Mr. Ruth's testimony. If it misstates it,

17 I'm sure he'll correct me.

18 MR. MAY: Could you read it back to the

19 witness.

20 (Whereupon the portion of the record

21 was read as requested.)

22 THE WITNESS: Could you do it again?

23 I'm sorry.

24

Page 214

1 (Whereupon the portion of the record

2 was read as requested.)

3 MR. MAY: She can read it again. I know

4 it's hard to testify all day.

5 MR. BURDEN: How about I just do a better

6 job with the question.

7 MR. MAY: I actually like that question

8 really well. I think I want to stick with it,

9 but if you want.

10 BY MR. BURDEN:

11 Q So, Mr. Ruth, our analysis has shown

12 that substantially all Long Leaf Trading customers

13 lose money. And I keep asking you, you know, do

14 customers make or lose money overall. And it seems

15 like you haven't been able to tell me, that you sort

16 of don't know overall, is that right?

17 A Am I allowed to just like go off the

18 record and explain something to you so I could help

19 you here?

20 Q You can't go off the record, but you

21 can definitely explain stuff. That's why you're

22 here.

23 A Why can't we go off the record?

24 Q We're not going to go off the record.

Page 215

1 A I think it would help you ask better

2 questions.

3 MR. MAY: They actually control the

4 record, so I can't tell her to go off the

5 record. Only they can tell her to go off

6 the record.

7 A Can I use that dry erase board to show you?

8 BY MR. BURDEN:

9 Q You can, but I can give you a piece of

10 paper as well. Would that be helpful?

11 A Sure.

12 Q Great. And how about a red marker,

13 will that be helpful?

14 A Perfect.

15 MR. MAY: Why don't you answer his

16 questions, and then at the end I'll have

17 the opportunity to ask you questions.

18 THE WITNESS: I'm confident I'm okay here.

19 MR. MAY: I'm confident this is not

20 what we discussed, so you don't have to draw

21 him an illustration.

22 THE WITNESS: No, I understand. I just

23 want to --

24 MR. MAY: And you're not answering his

Page 216

1 question when you do that.

2 THE WITNESS: I know I'm not answering

3 his question. In my opinion, I'm going to help

4 him ask better questions.

5 MR. MAY: Well, I don't know that that's

6 your job.

7 MR. BURDEN: I've never been in this

8 situation before.

9 MR. MAY: Are we on the same page?

10 Is there a pending question?

11 MR. BURDEN: There is.

12 Q Mr. Ruth, you testified you'd like to

13 help me ask better questions, right?

14 A Yes, and I'm not trying to insult you.

15 Q I am not insulted. I want you to help me.

16 A Okay.

17 Q And you had intimated that you could

18 make a drawing or a diagram that you think would

19 help me ask questions to get better, more meaningful

20 responses from you, correct?

21 A Yes, yes.

22 Q So would you draw me whatever you're going

23 to draw me, please.

24 A Okay. Well, I'm going to draw and

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 213 - 216

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 56 of 115 PageID #:2103
Page 217

1 I'm going to provide a narrative here. So the

2 first thing I want to say is I know what you're

3 getting at is is that if you know that the account

4 performance is that people have lost money, which

5 I don't know, but if that's --

6 MR. MAY: That's the premise to his

7 question.

8 A -- the premise, yes, then how can you

9 say to somebody during the solicitation process

10 that you are doing well and that you have these

11 great moments and all this kind of stuff. And I'm

12 going to explain to you how that is the case.

13 BY MR. BURDEN:

14 Q Thank you.

15 A Am I kind of on the right page here,

16 right track?

17 Q I think we are absolutely on the same

18 page, yes. Draw away, please.

19 MR. MAY: I disagree.

20 A All right. So let's say you bring on

21 a client and he's got $25,000, okay?

22 MR. MAY: Are you creating a

23 hypothetical --

24 THE WITNESS: Yes.

Page 218

1 MR. MAY: -- in response to his question?

2 THE WITNESS: Yes.

3 MR. MAY: I don't know that he wants

4 a hypothetical.

5 BY MR. BURDEN:

6 Q I'd like a hypothetical. Mr. Ruth,

7 please draw me whatever it is you would like to

8 draw me.

9 MR. MAY: I don't really know that

10 there's a pending question. So he's not

11 really --

12 THE WITNESS: I feel like I can save us

13 like five hours if I just --

14 MR. MAY: Well, here's --

15 THE WITNESS: -- explain this to him

16 one time.

17 MR. MAY: That -- I don't know that

18 you're actually going to save us five hours.

19 You get enough attorneys in a room and actually

20 you end up using up all the time.

21 MR. BURDEN: You guys are already coming

22 back.

23 THE WITNESS: I know, but I'm also

24 getting kind of frustrated. I want to alleviate

Page 219

1 my frustration.

2 MR. MAY: Well, I don't know that you're

3 going to -- I think he's got a never-ending

4 supply of questions --

5 THE WITNESS: Oh, yeah.

6 MR. MAY: -- and you're not saving

7 yourself any time by doing this. That's my

8 gut instinct.

9 THE WITNESS: Yeah, but they're just not

10 getting this concept.

11 MR. BURDEN: Mr. Ruth, would you like to

12 go off the record and consult with your counsel

13 and come back or would you like to --

14 MR. MAY: Yeah, I think we need a bathroom

15 break.

16 THE WITNESS: Yeah, yeah.

17 MR. BURDEN: Okay, let's do that.

18 MR. MAY: Because I don't really know that

19 there's a pending question.

20 THE WITNESS: Do you think I need to bring

21 this with me?

22 MR. MAY: No.

23 MR. BURDEN: There doesn't have to be a

24 pending question. He can do whatever he wants

Page 220

1 in this record.

2 MR. PATRICK: It's just a piece of paper.

3 (Whereupon a recess was taken from

4 4:37 p.m., to 4:52 p.m., after which

5 the following proceedings were had:)

6 MR. BURDEN: Back on the record, please.

7 Q Before we broke for you to consult

8 with your counsel, Mr. Ruth, you were going to

9 draw me an illustration that you felt would help

10 me ask better questions.

11 A I've decided to put the ball back

12 in your court and let you ask me questions. I think

13 you're more than capable of asking me the right

14 questions.

15 MR. BURDEN: All right. So I'll tell

16 you what. I had a couple more questions about

17 the last call that we listened to and I think

18 rather than try to remember it, I'll just play

19 that same bit again. So we're looking at

20 Exhibit 133.

21 MR. MAY: We're listening, yeah.

22 MR. BURDEN: That's right. Very good.

23 We're listening to Exhibit 133. I'm starting

24 it at 1:37:51.

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 217 - 220

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 57 of 115 PageID #:2104
Page 221

1 (Whereupon the audio was played.)

2 MR. BURDEN: So let me stop it there

3 at 1:39:17.

4 Q So it sounds like you're talking to

5 this customer here and you're saying that you're

6 confident you can do well for them, is that right?

7 A I don't know if I said that verbatim

8 but ...

9 Q It's definitely not verbatim, but is that

10 the gist of it?

11 MR. MAY: The gist --

12 A No. I think the gist of it is really

13 to talk about that there's volatility in the market

14 and it gives me the ability to do better than the

15 2:1 risk-reward ratio.

16 BY MR. BURDEN:

17 Q All right. And at the end where you

18 were talking about exceeding something, what were

19 you talking about exceeding there?

20 A Well, the whole equation is based off of

21 risking $2 for every dollar in premium collection.

22 If there's an increase in volatility when you're

23 selling an option, it gives you the ability to

24 collect more premium. When you collect more

Page 222

1 premium, you increase the profitability -- the

2 potential profitability of a trade and you decrease

3 the amount of risk. So essentially when you win,

4 if the trade pans out, you could win more and when

5 you lose, you lose less.

6 Q Got it.

7 MR. BURDEN: So let's pick this back up

8 at 1:39:21.

9 (Whereupon the audio was played.)

10 MR. BURDEN: So I want to stop it there

11 at 1:40:19.

12 Q And the part I want to ask you about

13 is you're talking about showing this customer that

14 using these Time Means Money strategies, though you

15 don't say that in those words, you can add an

16 income-generating component to their portfolio.

17 Did I summarize that accurately?

18 A I wasn't listening that intently to be

19 able to say if that's true or not.

20 MR. BURDEN: All right. Well, I'll

21 tell you what. Let's listen to it again.

22 MR. MAY: Can you go back to 39:17,

23 which is where we left off before? I don't

24 really see the need to omit four seconds.

Page 223

1 Do you? Does anyone else?

2 MR. BURDEN: Because it's hard to put

3 the mouse there.

4 MR. MAY: Oh, okay.

5 MR. BURDEN: Yeah, I tried to do that.

6 I'm not skipping that four seconds for any

7 particular reason.

8 MR. MAY: Okay.

9 MR. BURDEN: If I can get it to do that,

10 I will. Yeah, and I can. So we'll start at

11 1:39:21 again. Sorry.

12 (Whereupon the audio was played.)

13 MR. BURDEN: All right. So I'm stopping

14 it there at 1:40:19.

15 Q So, Mr. Ruth, the part I want to talk

16 about is where you say to this customer, prospective

17 customer that you want to show them that they can

18 get a consistent income-generating component to

19 their portfolio from Time Means Money. Is that

20 about what you said? Did I get that right?

21 A No, no. Not only that, but I don't

22 think that this snippet is reflective of what

23 you're trying to say. But you would have to listen

24 to the whole entire phone call in its entirety

Page 224

1 to understand what is going on in that snippet

2 that you have.

3 Q Got it, got it.

4 A But I think, from what I'm gathering

5 from this, is that this guy's an equity options

6 trader or he does equity options, and he is maybe

7 amazed by the premium collection and amount of

8 risk that you're taking on that we're getting in

9 futures options is I guess what's going on here.

10 But I wouldn't know that unless you went to probably

11 five minutes into the phone call.

12 Q Got it, got it. So the question I want

13 to ask you about that, though, the snippet we just

14 heard, is did you have any clients who were able

15 to achieve a consistent income-generating component

16 to their portfolio from Long Leaf Trading?

17 A I mean, are you asking this question

18 on its own or are you asking it because we played

19 this? Because, I mean, it's not applicable to that.

20 Q Well, I'll tell you what. Let's pretend

21 we didn't listen to the call --

22 A Okay.

23 Q -- and I'll ask you were there

24 any clients you had that achieved a consistent

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 221 - 224

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 58 of 115 PageID #:2105
Page 225

1 incoming-generating component to their portfolios

2 from the Long Leaf trading recommendations?

3 A Well, it depends how you define consistent

4 income-generating component. But I understand that

5 as having -- I mean, you're bringing in premium and

6 you're selling it using options, so one can make

7 the argument that it's consistent income generation.

8 Whether it's realized or not I don't think is part

9 of that statement so ...

10 Q Got it. So I think that's a pretty

11 significant difference, though, the difference

12 between --

13 A Right, yeah.

14 Q Well, let me ask, if you would, please.

15 A Yeah.

16 Q The difference between realized income

17 and -- what's the best way to describe it, paper

18 profits or unrealized gains and --

19 A Cash balance.

20 Q There we go, cash balance. So what's

21 the difference between cash balance and realized

22 income in your mind?

23 A Cash balance is the account equity

24 plus the amount of premium that you've collected.

Page 226

1 Q And that premium could ultimately

2 before expiration leave the account, correct?

3 A Yes.

4 Q Or it might stay, in which case it would

5 be realized, correct?

6 A Correct.

7 Q All right. So which of your clients

8 achieved a consistent income-generating component

9 to their portfolio in the form of realized gains

10 from Long Leaf Trading?

11 A I couldn't -- I don't recall.

12 Q Is it fair to say that none of them did?

13 A Not fair at all.

14 Q All right. So why do you dispute that

15 characterization?

16 A Why do I dispute it?

17 Q Yeah.

18 A Because I don't recall if they did,

19 which doesn't mean that I'm willing to say that

20 nobody did.

21 Q Okay. Well, can you recall anybody

22 who was able to achieve consistent realized gains --

23 A If you asked me in 2017 about things that

24 happened in 2017, probably. But this is September

Page 227

1 of 2019, and it's been two or three years. I don't

2 know.

3 Q Do you recall what percentage of your

4 clients at Long Leaf Trading --

5 A No.

6 Q -- were able to achieve an

7 income-generating component to their portfolio

8 from realized gains at Long Leaf Trading?

9 A No, I don't recall.

10 MR. BURDEN: All right. Sorry. This

11 takes a while to like load up another call.

12 I'll tell you what. While we're waiting, let's

13 just look at some other documents because

14 knowing the tech around here, it may never

15 load.

16 (Whereupon CFTC Exhibit No. 134 w a s

17 marked for identification, MM.)

18 Q All right. Mr. Ruth, I want to hand

19 you what I've marked as CFTC Exhibit 134. Take

20 a moment, if you would to review it, please, and

21 then indicate to me when you have reviewed it to

22 your satisfaction.

23 MR. MAY: Ready?

24 THE WITNESS: Yes.

Page 228

1 BY MR. BURDEN:

2 Q All right. Mr. Ruth, do you recognize

3 the document I marked as CFTC Exhibit 134?

4 A Yes.

5 Q What do you recognize it to be, please.

6 A It's a document entitled Time Means Money

7 Demo Script, Revised July 13, 2016.

8 Q All right. So what is this thing, if you

9 know, please.

10 A This is the Time Means Money demo script.

11 Q All right. But what is that? What is it

12 used for?

13 A It is used for solicitation of clients

14 in the Time Means Money program.

15 Q So who wrote this script?

16 A I don't think one person wrote it.

17 Q Okay. Well, who contributed to it,

18 if you know?

19 A Tim Evans. I mean, I don't know.

20 I guess I could have some input into it. James

21 Leeney, Tony Klancic, Vince Prieto.

22 Q So it sounds like all of the brokers

23 at Long Leaf at the time contributed to this script,

24 is that right?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 225 - 228

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 59 of 115 PageID #:2106
Page 229

1 A Essentially, yeah.

2 Q And you contributed as well, correct?

3 A Yeah. I mean, I don't know in what

4 capacity, but yeah.

5 Q Well, that's my next question. What did

6 you contribute, if you remember?

7 A I added the line are you married and do

8 you have kids.

9 Q Okay. Do you remember anything else that

10 you added or took away?

11 A No, that's it.

12 Q Is that the sum total of your contributions

13 to the script or is that just --

14 A From what I recall.

15 Q Okay. Is it possible you contributed

16 more and you just don't remember or do you just

17 specifically remember that line about being married

18 and you didn't contribute anything else?

19 A From what I recall, that's the only thing

20 I contributed.

21 Q Did you ever tell anybody that you wrote

22 this script?

23 A It's possible.

24 Q Who would you have told? Let me rephrase

Page 230

1 that question.

2 A Okay.

3 Q Who did you tell that you wrote this

4 script?

5 A I don't recall.

6 Q Did you tell Mr. Leeney that you wrote

7 this script?

8 A It's possible.

9 Q But why --

10 A Mr. Leeney was there so ...

11 Q Did you tell Mr. Gecas that you wrote

12 this script?

13 A I don't think I've ever talked to

14 Mr. Gecas.

15 Q Oh, that's right. Did you tell Mr. Prieto

16 that you wrote this script?

17 A It's possible.

18 Q Did you write this script?

19 A I contributed to it.

20 Q Well, it sounds like your testimony

21 before is that you added this line about being

22 married, right?

23 A Um-hmm.

24 Q Yes?

Page 231

1 MR. MAY: And having kids.

2 BY MR. BURDEN:

3 Q Very good. That's what you contributed,

4 Mr. Ruth?

5 A From what I recall, that's one thing that

6 I can say that I contributed, yes.

7 Q Okay. Did you contribute more than that

8 to the script?

9 A There's a possibility.

10 Q So we're looking at Exhibit 134 h e r e .

11 You know, it's a script that it looks like it's

12 30 pages long. Do you recall what percentage of

13 this you contributed, if you can break it down like

14 that?

15 A No.

16 Q Was it a lot of the script or not much

17 of the script?

18 MR. MAY: Do you want to change your

19 prior testimony?

20 A My answer to all this is I don't know

21 what I contributed to the script.

22 BY MR. BURDEN:

23 Q Got it.

24 A Besides the fact that I can tell you

Page 232

1 that I did add the line, "Are you married and do you

2 have any kids?"

3 Q Okay. And this script was used by the

4 brokers at Long Leaf Trading to solicit clients,

5 correct?

6 A I don't think I can speak to that.

7 Q Okay. What did you use this script for?

8 A I used it to solicit people for the Time

9 Means Money program.

10 Q All right. Do you know if other brokers

11 at Long Leaf Trading also used the script?

12 A I don't know. How do you define using

13 the script?

14 Q Well, did you ever overhear any brokers

15 use it, read from it?

16 A Parts of it, yeah.

17 Q Okay. Did you ever give the script to

18 any of the other brokers?

19 A I don't think so.

20 Q Did you ever -- sorry.

21 A Not that I know of.

22 Q Did you ever talk to any of the other

23 brokers about this script we see in Exhibit 134?

24 A Talk to them about it?

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 229 - 232

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 60 of 115 PageID #:2107
Page 233

1 Q Yeah.

2 A Sure.

3 Q Okay. Who did you talk to, please.

4 A I don't -- no clue.

5 Q And do you recall what any of these

6 brokers said to you or what you said to them about

7 the script?

8 A No.

9 Q All right. So let's take a look at the

10 script, if we could, please. So would you turn,

11 please, to page 3 of the script in Exhibit 134.

12 A (Witness complies).

13 Q Are you with me?

14 A Yep.

15 Q All right. So I want to direct your

16 attention to Bullet 5 and it says 76.5 percent

17 of all options expire worthless. Let's skip down

18 to B. It says, "Okay. The Time Means Money program

19 utilizes short option strategies as the investment

20 vehicle to drive results. Now, the reason this is

21 so important is because it's a fact that on average

22 of 76.5 percent of all options held to expiration at

23 the Chicago Mercantile Exchange expire worthless."

24 Is this a piece that you contributed?

Page 234

1 A No.

2 Q All right. So is this a thing that

3 you said on calls with customers or prospective

4 customers?

5 A If I'm using the script and it's part

6 of the script, then yes.

7 Q All right. So do you know if this

8 is true, that on average 76.5 percent of all options

9 held to expiration expire worthless?

10 A According to one study by the CME Group.

11 Q All right. Did you read that study?

12 A Yes.

13 Q All right. What is the time period

14 for that study?

15 A 1997 through 1999.

16 Q All right. So do you know if that

17 fact has continued from 1999 through the date that

18 this script was utilized?

19 A I don't know. You tell me.

20 Q I don't tell you things. You tell me

21 things.

22 MR. MAY: I think the standard is

23 that he's not testifying and you are. So,

24 I mean, we can have --

Page 235

1 THE WITNESS: No, I understand.

2 MR. MAY: We can have the court reporter --

3 THE WITNESS: You guys bring this up

4 every year like.

5 MR. MAY: Okay. But you've never talked

6 to the CFTC before.

7 THE WITNESS: Yeah, I understand.

8 MR. MAY: I think you're confusing them

9 with another regulator. So okay. Do you even

10 recall the question anymore? Do you want

11 the court reporter --

12 THE WITNESS: Yeah, can you --

13 MR. MAY: -- to read it back to you?

14 THE WITNESS: -- read back the question?

15 (Whereupon the portion of the record

16 was read as requested.)

17 A I don't think it's relevant because

18 I think you're referring to one specific study

19 which is noted on the slide.

20 BY MR. BURDEN:

21 Q But that's not my question. My question

22 is do you know if this statistic held through the

23 later period?

24 A I stand behind my testimony. I don't

Page 236

1 think it's relevant.

2 Q But that's not an answer to my question.

3 Would you like to answer my question?

4 A I don't know.

5 Q Okay.

6 A I don't know.

7 Q All right. Well, I'll tell you what.

8 Let's turn to page --

9 MR. MAY: Is it possible it could be

10 higher or lower?

11 THE WITNESS: Yeah. I mean, it's possible

12 it could be -- yeah, there's many possibilities.

13 BY MR. BURDEN:

14 Q All right. So --

15 A I think, though, saying on average and

16 citing the specific source is sufficient, though.

17 Q All right. So let's turn to page 7, if we

18 could, please, of the script.

19 A Sure.

20 Q All right. I want to direct your

21 attention to the top part of the page where

22 there's a bullet that says, "10. Introduce the

23 Three Principles." And it says, A, "Since 2009

24 Long Leaf was founded on three principles. One,

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 233 - 236

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 61 of 115 PageID #:2108
Page 237

1 futures and options on futures should be easy

2 to understand. Two, we should be 100 percent

3 transparent and conduct ourselves with integrity

4 at all times. Three, we should provide our clients

5 a strong return on their investment." So is this

6 a piece that you contributed, Mr. Ruth?

7 A Nope.

8 Q All right. Do you know who wrote this bit?

9 A I don't know, man. Like this is

10 approved by the compliance department. It's given

11 to me. I do my job. So I don't know exactly who

12 contributed what, what pieces or what. But it's

13 the job of the compliance department at Long Leaf

14 Trading Group to approve or disapprove any sales

15 solicitation materials.

16 Q And who was in the compliance group?

17 A Tim Evans is the chief compliance officer.

18 Q Was there anybody else in that compliance

19 group during your tenure at Long Leaf?

20 A Maybe Brian Adams at the end. I don't

21 know. I don't know.

22 Q Okay. Anybody other than those two guys?

23 A I don't know the process. My process

24 is, you know, I had like a manual that says what

Page 238

1 I'm supposed to do, like send in this or do that

2 or, you know, get the documents, only use stuff

3 that's approved by the compliance department.

4 Q Got it. So is this something you said

5 to clients on calls, that one of the principles of

6 Long Leaf is that we should provide our clients with

7 a strong return on their investment?

8 A If it's on a script and I'm approved --

9 it's approved by the compliance department and I'm

10 supposed to utilize it in the solicitation, then it

11 would have been said.

12 Q All right. So what is your basis for --

13 or what was your basis for saying to customers that

14 Long Leaf, one of Long Leaf's principles is to --

15 you know, scratch that. I think a better way to ask

16 this question is just did Long Leaf in fact provide

17 clients with a strong return on their investment?

18 A I don't think that's what the statement

19 says.

20 Q I understand. But my question is did

21 Long Leaf --

22 A I think you're missing out on the word

23 should.

24 Q Right. But did Long Leaf in fact

Page 239

1 ultimately provide clients with --

2 A I don't find it applicable because

3 it says the word should. You're disregarding that

4 word.

5 Q Well, let's not worry about Exhibit 134,

6 all right? I'm just going to ask my question in a

7 vacuum, all right? Did Long Leaf Trading provide

8 clients with a strong return on their investment?

9 A I mean, you're disregarding -- you're

10 only asking the question because it's in the script

11 and you want to disregard the script.

12 MR. MAY: Let's back up.

13 THE WITNESS: Yeah.

14 MR. MAY: Okay. Let's put away

15 Exhibit 134. And you've been asked this all

16 day, okay?

17 THE WITNESS: Yep.

18 MR. MAY: Do you want to change your

19 testimony about whether you know --

20 A I don't know.

21 MR. MAY: -- the results?

22 A I don't know the results specifically.

23 BY MR. BURDEN:

24 Q All right. So let's pick 134 back

Page 240

1 up, if we could, please, and get back to page 7.

2 Are you there?

3 A Yep.

4 Q All right. So let's look at 10(B).

5 And 10(B) says, "Now, these three principles are

6 what we have built our company upon and everything

7 that we do since our inception. At Long Leaf we

8 measure our success by our clients' success. As a

9 company we wouldn't have the ability to work with

10 hundreds of clients month after month for six years

11 and oversee millions of dollars if we weren't being

12 profitable for them. Does that make sense?" So

13 do you know who wrote that piece of the script?

14 A Again, no, I don't know.

15 Q So it wasn't you then?

16 A The only thing that I can tell you

17 that I wrote with 100 percent certainty is what

18 I previously testified to, that are you married or

19 do you have any kids.

20 Q Got it. So this piece we just read --

21 and the statement I want to focus on is we wouldn't

22 have the ability to work with hundreds of clients

23 month after month for six years and oversee millions

24 of dollars if we weren't being profitable for

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 237 - 240

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 62 of 115 PageID #:2109
Page 241

1 them -- is that something you said to customers

2 and prospective customers on solicitation calls?

3 A The policy at Long Leaf Trading Group

4 is that the solicitation process is approved by the

5 compliance department, and it is my duty to carry

6 out the solicitation process in accordance with the

7 script that I've been given.

8 Q Did you do that?

9 A So in the event that it's on the script,

10 then -- and approved by the compliance department,

11 then I said it.

12 Q All right. So was this script approved

13 by the compliance department?

14 A I don't know if this specific one was.

15 I don't have the ability to determine that.

16 Q Do you recall telling customers that

17 Long Leaf wouldn't have the ability to work with

18 hundreds of clients month after month for six years

19 and oversee millions of dollars if Long Leaf weren't

20 being profitable for them? Do you remember saying

21 that to people?

22 A No, I don't recall. But, again, if it's

23 in an approved script by the compliance department

24 and I was soliciting a client, everything that's

Page 242

1 in the script would have been said by me.

2 Q Got it. In fact, Long Leaf was

3 not profitable for customers, is that correct?

4 A I can't answer that question. I don't

5 know.

6 Q All right. So if you don't know, why

7 would you say this to clients?

8 A I don't know because it's 2019,

9 and I don't know the specifics of what's going

10 on. The other thing too is clients start and stop

11 at different times. So if you have a client -- ten

12 clients who started the first month and they all

13 made money, then that line can be correct.

14 Q Got it.

15 A So I don't know.

16 Q So how many clients started the first

17 month and just traded and left with a profit? How

18 many of your clients did that?

19 A I'm not saying that they had to leave,

20 but it's at the time this statement was made they

21 could be profitable.

22 Q Got it. So was there ever a period

23 of time when all of your clients at Long Leaf

24 were up?

Page 243

1 A Yes.

2 Q When was that, please.

3 A I want to say it was June, July, August,

4 September, October of 2016 maybe.

5 Q All of those months or --

6 A No.

7 Q -- somewhere in there?

8 A Somewhere in there I remember that

9 we had like a big surge, and I even had clients

10 deposit more money from their initial investments

11 and things of that nature so ...

12 Q Do you recall what month that was?

13 A It's somewhere in that time period.

14 I know it was probably -- it was probably before

15 November of 2016.

16 Q All right. So when do you think it was

17 then that client accounts were --

18 A Somewhere between the summer of 2016

19 and November of -- and October of 2016, the end

20 of October of 2016.

21 Q All right. And was that just for one

22 month or was that for multiple months?

23 A I couldn't tell you, but I know that

24 there was a time where people were moving in the

Page 244

1 right direction and were above their initial

2 equity levels.

3 Q Was that the only month where customers

4 were --

5 A From my recollection --

6 Q You've got to let me finish the question.

7 MR. MAY: You can't answer his question --

8 THE WITNESS: Yeah, yeah, yeah.

9 MR. MAY: -- until he's done answering --

10 THE WITNESS: All right.

11 MR. MAY: -- asking it.

12 THE WITNESS: I was faster.

13 MR. MAY: Now, but we are at 5:26.

14 How much longer are we going to go?

15 MR. BURDEN: As long as you guys can stand.

16 MR. MAY: We might have to -- I mean,

17 do you know how many more exhibits you have?

18 MR. BURDEN: You're looking at it.

19 MR. MAY: So there's a lot.

20 MR. BURDEN: Yeah. So I'll tell you what,

21 you know. I don't --

22 THE WITNESS: You never had any intentions

23 of this being a one-day thing.

24 MR. MAY: Well, he has no idea how

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 241 - 244

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 63 of 115 PageID #:2110
Page 245

1 quickly or long it's going to go.

2 MR. BURDEN: Yeah. So as a general

3 matter, I don't answer questions. But, yeah,

4 definitely I was hopeful that --

5 MR. MAY: Okay. We're still on the

6 record. Do we need to be on the record for

7 this part?

8 MR. BURDEN: Do you want to go off the

9 record?

10 MR. MAY: Sure, yeah.

11 MR. BURDEN: Yeah, okay. Could we go

12 off the record, please.

13 (Whereupon a recess was taken from

14 5:30 p.m., to 5:40 p.m., after which

15 the following proceedings were had:)

16 MR. BURDEN: Back on the record, please.

17 MR. MAY: Okay. Ashley, I think we're

18 going to take you up on your offer that this

19 is as convenient a place as any to cease for

20 today, continue to be under subpoena and you'll

21 contact me about what your available dates are.

22 And I'll check my calendar and I'll bring

23 Mr. Ruth back with me, and we'll kind of

24 take it from there.

Page 246

1 MR. BURDEN: Thank you. I read this

2 so I don't screw it up. Let me read the bit

3 I've got to read and then --

4 MR. MAY: Okay.

5 MR. BURDEN: -- we'll go off the record.

6 Mr. Ruth, at this time we're adjourning to a

7 date to be determined later. Although your

8 testimony is adjourned, you remain under

9 subpoena. Mr. Ruth, is there anything that

10 you wish to clarify or add to the statements

11 that you have made today?

12 THE WITNESS: Not at this time.

13 MR. BURDEN: All right. Counsel, anything

14 that you would like to add or clarify to --

15 MR. MAY: No, I think it makes sense.

16 And pursuant to what I understand the rules

17 for the CFTC is when you're done, I'll have

18 some clarifying questions at that time. It

19 doesn't really make sense to do them now.

20 MR. BURDEN: Okay. Well, I'll tell

21 you what. We are off the record at 5:35 on

22 September 26th.

23

24

Page 247

1 WHICH WERE ALL THE PROCEEDINGS

2 HAD OR OFFERED AT SAID HEARING

3 OF THE ABOVE-ENTITLED CAUSE.

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Page 248

1 STATE OF ILLINOIS)

 ) SS.

2 COUNTY OF C O O K)

3

4 I, MARY MASLOWSKI, CSR, do hereby

5 certify that I reported in shorthand the proceedings

6 had at the examination under oath aforesaid, and

7 that the foregoing is a true, complete and accurate

8 transcript of the proceedings at said examination

9 under oath as appears from the stenographic notes

10 so taken and transcribed on the 4th day of October

11 2019.

12

13

14

15 Certified Shorthand Reporter

16

17

18

19

20

21

22

23

24

[9/26/2019 9:50 AM] Ruth, Jeremy 2019-09-26 Pages 245 - 248

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 64 of 115 PageID #:2111
Long Leaf Trading Group

Ruth, Jeremy 2019-10-11

10/11/2019

Condensed Transcript

Prepared by:

Ashley Burden

CFTC

Friday, October 29, 2021

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 65 of 115 PageID #:2112
Page 249

1 UNITED STATES OF AMERICA

 BEFORE THE

2 COMMODITY FUTURES TRADING COMMISSION

3

4 IN THE MATTER OF: )

 )

5 LONG LEAF TRADING GROUP, INC. )

6

7

8

9 VOLUME II

10

11 The continued examination under

12 oath of JEREMY RUTH, taken pursuant to subpoena

13 and the rules of the U.S. Commodity Futures Trading

14 Commission, reported by Mary Maslowski, a Certified

15 Shorthand Reporter and Notary Public within and

16 for the County of Cook and State of Illinois,

17 at 525 West Monroe Street, 9th Floor, Chicago,

18 Illinois, commencing at the hour of 9:50 o'clock

19 on October 11, 2019.

20

21

22

23

24

Page 250

1 A P P E A R A N C E S:

2

 MR. ASHLEY J. BURDEN, Senior Trial Attorney

3 MS. ELIZABETH M. STREIT, Trial Team Leader

 MR. JOSEPH J. PATRICK, Senior Investigator

4 U.S. COMMODITY FUTURES TRADING COMMISSION

 DIVISION OF ENFORCEMENT

5 525 West Monroe Street, Suite 1100

 Chicago, Illinois 60661

6 (312) 596-0700

7

 On behalf of the U.S. Commodity

8 Futures Trading Commission;

9

 CHUHAK & TECSON, P.C.

10 BY MR. ANDREW S. MAY

 30 South Wacker Drive, Suite 2600

11 Chicago, Illinois 60606

 (312) 855-6105 (direct)

12 amay@chuhak.com

13

 On behalf of the Witness.

14

15

16 A L S O P R E S E N T:

17

 MS. NICOLE KRAAI, Intern.

18

19

20

21

22

23 CSR License No. 084-003278.

24

Page 251

1 I N D E X

2 WITNESS EXAMINATION

3 JEREMY RUTH

4 By Mr. Burden 252, 442

5 By Mr. May 400

6

 E X H I B I T S

7 CFTC EXHIBIT MARKED FOR ID

8 135 2 5 3

 136 2 5 9

9 137 2 6 2

 138 2 6 8

10 139 2 7 8

 140 2 8 1

11 141 2 8 6

 142 2 9 8

12 143 3 0 5

 144 3 0 8

13 145 3 1 0

 146 3 2 0

14 147 3 2 7

 148 3 3 8

15 149 3 4 5

** 150 357

16 151 3 6 4

 152 3 6 8

17 153 3 7 2

18

19

20 ** NOTE: Exhibit No. 150 is an audio file

 which was not tendered for inclusion

21 in the transcript.

22

23

24

Page 252

1 JEREMY RUTH,

2 called as a witness herein, having been previously

3 sworn and examined, testified further as follows:

4 FURTHER EXAMINATION (Cont'd.)

5 BY MR. BURDEN:

6 Q All right. Mr. Ruth, I'm Ashley

7 Burden. This is Joe Patrick and Elizabeth

8 Streit. We're members of the staff of the CFTC.

9 We're officers of the Commission for the purposes

10 of this proceeding. We are today resuming the

11 examination of Jeremy Ruth which was adjourned

12 on September 26th. Mr. Ruth, are you represented

13 by counsel?

14 A Yes.

15 MR. BURDEN: All right. Counsel, will

16 you please identify yourself.

17 MR. MAY: Sure. Andrew May, Chuhak &

18 Tecson.

19 BY MR. BURDEN:

20 Q All right. And also with us

21 today is Nicole Kraai, an intern for the CFTC,

22 appearing with the gracious permission of Mr. May

23 and Mr. Ruth. Testimony today is pursuant to a

24 Commission subpoena which has been previously

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 249 - 252

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 66 of 115 PageID #:2113
Page 253

1 marked as Exhibit 116. And let the record reflect

2 that a copy of the formal order of investigation

3 in this matter has been made available and will

4 continue to be made available for examination by

5 counsel and the witness during the course of this

6 proceeding.

7 Mr. Ruth, thanks for coming

8 back. I want to start today by looking at a

9 couple of the documents that you produced to us

10 on the 26th.

11 MR. MAY: And, Ashley, you continue to

12 have copies for counsel?

13 MR. BURDEN: Of course.

14 (Whereupon CFTC Exhibit No. 135

15 was marked for identification.)

16 Q All right. Mr. Ruth, I'm handing you

17 what I've marked as CFTC Exhibit 135. And take

18 a moment to look at it, if you would, please, and

19 when you finish, I'll ask you if you remember what

20 it is and what it's all about.

21 A (Witness complies).

22 MR. MAY: Ashley, while we're doing

23 that, do you still have the exhibits that

24 we used last time? I'm going to need a copy

Page 254

1 of those so when you're done with your

2 examination, I can ask Mr. Ruth questions

3 about those.

4 MR. BURDEN: Okay. Well, I'll tell

5 you what. Why don't you -- do you have a list

6 of the ones that you want to talk about?

7 MR. MAY: Possibly, but I'm probably

8 going to need to see all of them.

9 MR. BURDEN: Okay. Let's talk about

10 that on the break.

11 MR. MAY: Sure.

12 MR. BURDEN: We'll be able to do that

13 in one way or another.

14 Q All right. Mr. Ruth, do you recognize

15 Exhibit 135?

16 A Yes.

17 Q Can you tell me what it is, please.

18 A I think it's just emails back and

19 forth between me and Tim Evans after I left Long

20 Leaf Trading Group.

21 Q All right. So this is an email and

22 attachments that you produced to us, correct?

23 A Yes.

24 Q All right. So there's references

Page 255

1 in here -- it looks like in Exhibit 135 t h e r e

2 is a release signed by a person named Okey Oteh,

3 and that's Ruth 037. Do you know who Okey Oteh is?

4 A Yeah, he was a customer at Long Leaf

5 Trading Group.

6 Q Was he a customer of yours?

7 A Yes and no. He was originally solicited

8 by Tony Klancic, and after Tony Klancic left the

9 firm he was on letter of direction. And after a

10 while being on letter of direction, I became his

11 broker.

12 Q All right. And it looks like this

13 is a release and Long Leaf paid him $3,134.31, is

14 that right?

15 A That's what it says, yeah.

16 Q So did you pay that money?

17 A No, I have no clue, anything about this.

18 Q So how did this release come to be in

19 your possession?

20 A I was owed money that was not paid

21 to me on my final paycheck and I reached out to

22 Tim Evans to inquire why, and this is one of the

23 things that he, I guess, deducted from my paycheck.

24 Q All right. So Mr. Evans had deducted

Page 256

1 or claimed to have deducted this $3,000 payment

2 to Mr. Oteh from your final paycheck you were owed,

3 correct?

4 A Correct.

5 Q So did Mr. Evans ever tell you what

6 the basis for that was, like why you should have

7 to pay for that?

8 A I think in here it says something

9 about -- I think it's in another email that we

10 produced to you, but it says something of the nature

11 that, I don't know, some sort of complaint from

12 Mr. Oteh Okey, which I never heard firsthand.

13 Q Do you know what the basis is for

14 this release and this payment to Mr. Oteh from

15 Long Leaf?

16 A No, I don't. To be honest with you,

17 I don't even think it's -- in my opinion, I don't

18 think it's even like a real document. I don't think

19 Mr. Oteh Okey signed this.

20 Q Why do you think that?

21 A Because of the date that it was

22 signed, the date that the money was taken from

23 my paycheck.

24 Q Did you ever ask Mr. Evans about that

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 253 - 256

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 67 of 115 PageID #:2114
Page 257

1 or accuse him of ginning up a fake document?

2 A I mean, I had suspicions -- I don't

3 know if I ever said anything. But, you know,

4 I've thought about it and I'm still considering,

5 you know, trying to use some sort of legal action

6 to recover all the damages.

7 Q From whom?

8 A From Long Leaf Trading Group.

9 Q All right. And it looks as well here

10 like in Exhibit 135 Mr. Evans attached -- well,

11 it looks like a bill from an attorney named Thomas

12 Burke. What do you know about Mr. Burke's work for

13 Long Leaf?

14 A I think that that was just like his

15 general NFA or I guess like futures-related legal

16 issue counsel.

17 Q All right. So why did he send that

18 to you? Was this something else he deducted from

19 your paycheck?

20 A Yeah. He had mentioned another

21 deduction with like Harish Patel, a legal bill or

22 something of that nature.

23 Q And is that what this -- that was my

24 next question here. So is that what this legal

Page 258

1 bill is for?

2 A I think so.

3 Q All right.

4 A It doesn't really say, but I think we're

5 supposed to assume that.

6 Q All right. And who is -- yeah,

7 that's what I assumed. Who is Harish Patel, please.

8 A Harish Patel was a client of mine

9 who at the end of like, I don't know, maybe like

10 the last weeks I was there he had complained about

11 the trading and he -- I guess he refused to speak

12 with me. So Tim Evans took over interacting with

13 him and he just had a complaint about like the

14 performance of the account. And Tim had told me

15 that, you know, at the time I wasn't responsible

16 for anything because I don't have anything to do

17 with the performance of the account -- and he said

18 this in front of everybody -- and that he would

19 handle all the legal fees and all that kind of

20 stuff. And then when we had this falling out,

21 all of a sudden this was deducted from my check

22 and I was presented with this as evidence, I guess.

23 Q Do you know if Mr. Evans or Long Leaf paid

24 a settlement to Mr. Patel?

Page 259

1 A No. I know that -- my understanding

2 is that they weren't able to come to terms and

3 they had some like heated argument and then he

4 filed maybe something with the NFA, and then the

5 NFA had called like an initial check on, you know,

6 I guess the situation. And then I don't know if

7 anything -- I never heard anything and I don't have

8 any complaints and nobody asked me any questions,

9 so I don't really know.

10 Q Got it, okay.

11 (Whereupon CFTC Exhibit No. 136

12 was marked for identification.)

13 Q All right. Mr. Ruth, I want to hand

14 you next what I've marked as CFTC Exhibit 136, and

15 this is a group exhibit consisting of a letter from

16 Mr. Schena to you and others and then a settlement

17 agreement and release relating to Mr. Schena's

18 client, Priscilla Lamar.

19 MR. MAY: The official one's yours.

20 MR. BURDEN: Yours is next, Andrew.

21 THE WITNESS: Sorry.

22 MR. MAY: Oh, okay. There's two documents.

23 Is that all 136?

24 MR. BURDEN: Yeah, yeah, it's a group

Page 260

1 exhibit.

2 MR. MAY: Oh, okay.

3 BY MR. BURDEN:

4 Q And take a moment to look this over

5 for me, please. And when you've finished, please

6 indicate and I'll ask you some questions about it.

7 A (Witness complies).

8 MR. MAY: Okay, I'm ready.

9 BY MR. BURDEN:

10 Q All right. Mr. Ruth, do you recognize

11 C F T C Exhibit 136?

12 A Yes.

13 Q All right. Can you tell me what it is,

14 please.

15 MR. MAY: Oh, that was the last exhibit?

16 MR. BURDEN: Correct.

17 MR. MAY: Okay. What was the prior one,

18 135?

19 MR. BURDEN: Correct.

20 MR. MAY: All right.

21 A I obtained this --

22 MR. MAY: He asked if you recognize it.

23 THE WITNESS: I said yes.

24

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 257 - 260

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 68 of 115 PageID #:2115
Page 261

1 BY MR. BURDEN:

2 Q All right. So this letter looks like

3 it was sent after you had departed from Long Leaf,

4 is that correct?

5 A Yes.

6 Q So who is Priscilla Lamar?

7 A Priscilla Lamar was a client of mine

8 at Long Leaf.

9 Q And did you pay any money towards

10 this settlement with Ms. Lamar that's reflected

11 in this settlement agreement and release we see

12 starting at Ruth 024?

13 A Absolutely not.

14 Q So how did you come to be in possession

15 of this, please.

16 A I sent you -- we also provided other

17 emails, so I don't know the exact dates. Either

18 February or March of this year I think I got some

19 weird correspondence from an attorney named Rebecca

20 Wing, who I think is Long Leaf's counsel, and she

21 was trying to collect money from me for I guess

22 this settlement. And that's the first time I heard

23 about it.

24 Q Got it, okay. Have you had any subsequent

Page 262

1 interactions with Ms. Wing?

2 A What is subsequent? What do you mean

3 by that?

4 Q Well, like I want to go back to 136

5 but -- sorry, yeah, 136. But, yeah, just so we're

6 on the same page, I didn't realize this was all

7 together.

8 (Whereupon CFTC Exhibit No. 137

9 was marked for identification.)

10 Q Let me hand you what I've marked

11 as CFTC Exhibit 137, and this is the email you

12 produced from Rebecca Wing. So take a moment to

13 look it over, please, and we'll all be on the same

14 page.

15 MR. MAY: Are you done reviewing it?

16 THE WITNESS: Yes.

17 MR. MAY: Okay.

18 BY MR. BURDEN:

19 Q All right. So, Mr. Ruth, do you recognize

20 Exhibit 137?

21 A Yes.

22 Q Can you tell me what it is, please.

23 A It's an email and then a response to

24 an email that I wrote to Tim Evans and a response

Page 263

1 from Tim Evans.

2 Q All right. So in the email dated

3 February 25, 2019 you were suggesting to Mr. Evans

4 that an attorney by the name of Rebecca Wing

5 was asking for money on behalf of Long Leaf Trading.

6 Is that what happened?

7 A Yeah.

8 Q So you didn't give her any money, right?

9 A No.

10 Q All right. So, you know, after the

11 conversation that's memorialized in Exhibit 137

12 with Ms. Wing, did you talk to her again? Did she

13 bug you more for money? What came of this?

14 A Yeah. I mean, again, I think

15 I submitted the emails to you about this. I had

16 asked her for more details about the whole situation

17 and, you know, I think her position was somewhere in

18 my employment contract that I have to indemnify --

19 is that the right word?

20 MR. MAY: Indemnify.

21 A -- indemnify them and, you know,

22 the language says off of like gross negligence

23 or wrongful misconduct or something of that nature.

24 And so I was trying to essentially ask her to tell

Page 264

1 me why she'd think that I acted negligently or

2 with gross misconduct and, you know, send me proof

3 of the settlement.

4 BY MR. BURDEN:

5 Q I did not see that email in the production.

6 Did Ms. Wing respond?

7 A Kind of. Not really. I mean --

8 Q What did she say?

9 A Well, that's how I got the --

10 Q Exhibit 136?

11 A -- 136. And then -- yeah, that's how

12 I got Exhibit 136.

13 Q All right. So Ms. Wing sent you the

14 documents we see in 136, correct?

15 A Yes.

16 Q Did she send you anything else?

17 A No, I don't think so.

18 Q All right. Did Ms. Wing follow up

19 at all or try to explain why you should pay this

20 money or what other money you owed?

21 A Not really.

22 Q When you say not really, does that

23 mean no or there was some halting communication?

24 Let me close this out.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 261 - 264

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 69 of 115 PageID #:2116
Page 265

1 A I don't think -- I don't know. I can't

2 speak for her, but I don't -- it was basically she

3 gave this to me and said pay it or we could do this

4 the easy way or the hard way and, you know, either

5 pay it or we're going to file a lawsuit against you.

6 Q And did they do that?

7 A Not to my knowledge.

8 Q Were there any other settlements

9 with Long Leaf customers that you were aware of?

10 And they don't have to be your clients, just however

11 you became aware of them.

12 A I think there's like a couple

13 like people who wrote like bad reviews on like

14 Google or something, and there might have been

15 like settlements to take down the reviews, things

16 of that nature.

17 Q So what do you remember about that?

18 Do you remember what customers were paid to take

19 down reviews on Google?

20 A I wouldn't say they were paid to take

21 down reviews on Google. I think what the customers

22 had done was wrote some things that were not

23 factual. And so it was more of like, hey, you need

24 to take this down because this isn't true.

Page 266

1 Q Do you remember the names of those

2 customers?

3 A I mean, I think Harish Patel might even

4 be one of them. I'm not sure.

5 Q Do you remember any others?

6 A I couldn't tell you the names.

7 Q So did you ever read those reviews that

8 were posted?

9 A Did I ever read them?

10 Q Yeah.

11 A Possibly. I don't necessarily recall.

12 Q Okay. Other than Harish Patel, were

13 they customers of yours that wrote these reviews?

14 A No, I think there were others.

15 Q All right. And so I think you testified

16 before just now that the reviews the customers wrote

17 were untrue, is that correct?

18 A Yeah. I mean --

19 Q Okay. So what's your basis for saying

20 that?

21 A Like, for example, somebody will

22 say like, oh, I lost -- like I'm just giving you

23 a hypothetical situation, but they'll say I lost

24 like 80 percent of my money in three months or

Page 267

1 something like that and, you know, well, you

2 lost 60 percent of your money in five months or,

3 you know. So it's that -- yeah, like that's why

4 it's untrue or ...

5 Q Well, how did you know that the

6 reviews were untrue? It sounds like from your

7 testimony that only maybe one of them was your

8 customer or you don't remember if you read it.

9 Like how do you know if the reviews were, you know,

10 true or false?

11 A Tim Evans told me.

12 Q Okay. And so these customers that

13 posted these Google reviews, did they pay Long Leaf

14 Trading as part of a settlement or did Long Leaf

15 Trading pay them, if you know?

16 A I'm not intimately familiar but, I mean,

17 I think Long Leaf Trading --

18 MR. MAY: Well, okay. He doesn't want

19 you to guess or speculate, I imagine.

20 THE WITNESS: All right.

21 MR. MAY: So if you know, then you know.

22 A Yeah, I'm not intimately familiar or

23 I don't recall.

24

Page 268

1 BY MR. BURDEN:

2 Q Well, did anybody tell you? Did you

3 come to know? Like I understand that you didn't

4 pay them or receive money from them, but was there

5 talk of it around the office? Is there anything

6 you recall about it?

7 A Yeah. I think this -- going back

8 to like 135, if you look at the release that

9 Oteh Okey signed, I think I've seen one before of

10 somebody else signing.

11 Q All right. So your recollection is

12 that Long Leaf Trading paid the people who wrote

13 the Google reviews and not the other way around?

14 A Correct.

15 (Whereupon CFTC Exhibit No. 138

16 was marked for identification.)

17 Q Mr. Ruth, I want to hand you what I've

18 marked as CFTC Exhibit 138. Take a look at it for

19 me, if you would, please, and indicate to me when

20 you've finished reviewing it.

21 A I'm ready.

22 Q Mr. Ruth, do you recognize CFTC

23 Exhibit 138?

24 A Yes.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 265 - 268

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 70 of 115 PageID #:2117
Page 269

1 Q Can you tell me what it is, please.

2 A It's more emails between me and Tim

3 Evans post my employment with Long Leaf Trading

4 Group.

5 Q All right. And so this is an email

6 that you produced to the CFTC, right?

7 A Correct.

8 Q So what's Operation Frosty, please.

9 A We were -- I guess it's just like

10 preparation of documents or preparation for an

11 NFA exam.

12 Q Well, you're talking about a file folder

13 labeled Operation Frosty, right?

14 A Yes.

15 Q So what's in that file folder, please.

16 A Just recordkeeping and -- I think it

17 was just recordkeeping for the, yeah, for the NFA

18 exam that we had coming up.

19 Q All right. Well, it sounds like

20 you're saying that something is not good about

21 Operation Frosty because you write, "Your attempts

22 to rule over those by installing fear are no longer

23 effective. During the PC diagnostic did you find

24 the file folder labeled Operation Frosty? Have

Page 270

1 you made the NFA aware of Operation Frosty? It

2 is surprising that a person with clear ethical

3 shortcomings would try to imply someone has acted

4 unethically." So what are you talking about here,

5 please.

6 A What am I talking about?

7 Q Yeah.

8 A I mean, I'm just going back with Tim

9 Evans about the fact that I'm upset that he screwed

10 me out of my paycheck.

11 Q Got it. So when you're talking

12 about Operation Frosty or the file folder labeled

13 Operation Frosty, who gave the file folder that

14 name?

15 A I don't recall.

16 Q Was it you?

17 A I don't recall.

18 Q All right. So how many files were in

19 that folder?

20 A I have absolutely no clue.

21 Q Did you put any files in that folder?

22 A Probably, yeah.

23 Q Okay. How many files?

24 A I have no clue.

Page 271

1 Q Was it more than one, let's say?

2 A Yes.

3 Q Okay. More than five?

4 A I would assume. I can't say.

5 Q All right. So what kind of files

6 did you put into the Operation Frosty file? Like

7 were they Word documents, PDFs?

8 A Yeah, they're Word documents.

9 Q All right. Any other types of files?

10 A Not that I recall.

11 Q All right. Do you remember the names

12 of any of those Word docs, like, you know, the file

13 name?

14 A Yeah, they're like order ticket templates.

15 Q So are order ticket templates the

16 only files that you put in this Operation Frosty

17 file folder?

18 MR. MAY: I'm sorry. Could I ask

19 the court reporter to read back the question.

20 MR. BURDEN: Sure.

21 (Whereupon the portion of the record

22 was read as requested.)

23 A I don't recall.

24 Q All right. On whose computer was this

Page 272

1 Operation Frosty file folder?

2 A I think it's in the Cloud.

3 Q So was it a shared, like a shared drive?

4 A Yeah, you could say that.

5 Q And who had access to it?

6 A Everybody on the broker team.

7 Q And that includes you, correct?

8 A Yes.

9 Q Did other people -- do you know

10 if other people on the broker team contributed

11 files to the Operation Frosty file folder?

12 A I mean, I can't recall specifically but ...

13 Q All right. I think you testified

14 before that Operation Frosty was something to do

15 with preparation for an NFA audit. Did I get that

16 right?

17 A Correct.

18 Q All right. So what form did that

19 preparation take?

20 A What do you mean?

21 Q Well, why was it -- why was there sort

22 of a specially designated folder for this effort?

23 Why was it called Operation Frosty?

24 MR. MAY: Okay. That's two questions.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 269 - 272

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 71 of 115 PageID #:2118
Page 273

1 Do you want to take them one at a time? Are

2 you aware of both questions that are pending?

3 THE WITNESS: Yeah.

4 MR. MAY: Okay.

5 A So what's the first question?

6 BY MR. BURDEN:

7 Q All right. So how was Operation Frosty

8 used to prepare for an NFA audit?

9 A I think when you -- I'm not a compliance

10 guy, so I don't really deal with the audits.

11 Q No, I understand.

12 A Yeah.

13 Q What do you understand? What do you know?

14 A I think it's just preparing all the

15 things that they're going to ask you for. I think

16 they give you like a checklist of the things that

17 they want, right?

18 MR. MAY: Okay. That sounds like you're

19 asking him a question.

20 A Well, I mean, yeah, I guess I don't know.

21 BY MR. BURDEN:

22 Q All right. So you'll have to forgive

23 my suspicion, though it sounds like you didn't have

24 much to do with it from your testimony. You know,

Page 274

1 you say, "Have you made the NFA aware of Operation

2 Frosty?" Why did you write that? Why would it be

3 necessary or good or bad for Mr. Evans to make the

4 NFA aware of Operation Frosty?

5 A I don't necessarily recall why

6 specifically I felt that way at the time. I

7 think it was just kind of in like a heated argument

8 about the fact that I didn't get my paycheck or my

9 paycheck wasn't what I was expecting it to be, and

10 I think I'm just going back and forth trying to

11 score points with him.

12 Q So why would you be scoring points

13 by bringing up this Operation Frosty? It seems

14 to me like it's good to prepare for an NFA audit,

15 and it seems to me like you're suggesting that

16 Operation Frosty is unethical from the next line.

17 Am I reading that right?

18 A That's the thing, is I don't know --

19 I don't know if preparation for an NFA audit is

20 ethical or unethical because I don't know what was

21 being done or what was presented to the NFA. So

22 I can't answer that question.

23 Q All right. I don't want to ask you

24 what the file directory address for the Operation

Page 275

1 Frosty folder is, but that's really my question.

2 Is it part of a larger drive? Where could we find

3 it?

4 A I have no --

5 MR. MAY: Didn't he already answer that?

6 MR. BURDEN: No.

7 Q So, Mr. Ruth --

8 MR. MAY: He actually said that it

9 was in the Cloud or it was a shared drive.

10 MR. BURDEN: Well --

11 MR. MAY: You're asking him where it is

12 on the computer system.

13 MR. BURDEN: Yeah, that's part of the

14 computer system. Watch this. We'll walk

15 through it and if Mr. Ruth knows, we'll know

16 too soon. And if he doesn't, then we'll move

17 on to the next exhibit.

18 Q So, Mr. Ruth, you testified that

19 this Operation Frosty folder was on the Cloud,

20 is that right?

21 A I believe so, yes.

22 Q All right. So are there other file

23 folders that were on the Cloud that you used at

24 Long Leaf Trading?

Page 276

1 A Yes.

2 Q Okay. Just for illustrative purposes,

3 what were some of the other file folders that were

4 on the Cloud?

5 A We had Power Point presentations

6 that we used during the solicitation process,

7 and those were represented to us as the official

8 ones from the compliance department that we were

9 allowed to use during the solicitations.

10 Q So you've got Power Points on the Cloud?

11 A Yes.

12 Q What else have you got on the Cloud?

13 A The official script that you had --

14 we talked about last time.

15 MR. MAY: Do you have a reference

16 number? You don't see it in front of you,

17 do you?

18 THE WITNESS: No, I don't have the

19 exhibit.

20 BY MR. BURDEN:

21 Q Okay. So let's say you're sitting

22 at your computer at Long Leaf Trading. Did you have

23 a computer at Long Leaf Trading?

24 A I did.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 273 - 276

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 72 of 115 PageID #:2119
Page 277

1 Q So you log on to your computer, right?

2 You start it up at the beginning of the day?

3 A Yes.

4 Q All right. So how do you navigate to the

5 Cloud?

6 A I would use Office 365.

7 Q All right. So you open Office 365, right?

8 A Yes.

9 Q So how do you get to the Cloud from there?

10 A I mean, it's a tab within the website.

11 Q So like the intranet for Long Leaf Trading,

12 is that right?

13 A I wouldn't necessarily say that.

14 Q All right. What does the tab say that

15 you go to?

16 A I don't know exactly. Shared folder or

17 something? I don't know.

18 Q Okay. So within that shared

19 folder there are a number of other folders,

20 and Operation Frosty is one of those folders,

21 is that right?

22 A I don't know. I don't know. This

23 is two years ago, and I don't know the directory

24 of Long Leaf and I don't know if it's still there.

Page 278

1 I don't know. I don't know anything.

2 Q Well, let's put that one aside then,

3 please.

4 A (Witness complies).

5 (Whereupon CFTC Exhibit No. 139

6 was marked for identification.)

7 Q Mr. Ruth, I want to hand you what I've

8 marked as CFTC Exhibit 139. Take a moment to look

9 at the document and tell me -- and I'll ask you if

10 you recognize it, but tell me when you've finished

11 reviewing it, please.

12 A I'm ready.

13 Q Mr. Ruth, do you recognize CFTC

14 Exhibit 139?

15 A No.

16 Q All right. I want to talk about it

17 anyway, if we could, please. So you'll see this

18 is from Mr. Evans to jruth@longleaftrading.com. And

19 Mr. Ruth writes, "Jeremy, I need an accounting for

20 all LLTG scripts" --

21 MR. MAY: Did you say that Mr. Ruth writes?

22 MR. BURDEN: If I did, I meant Mr. Evans.

23 MR. MAY: Okay.

24

Page 279

1 BY MR. BURDEN:

2 Q And Mr. Evans here in Exhibit 139

3 appears to be asking for an accounting of all

4 LLTG scripts, and he asks you to email him a

5 bunch of scripts. And then he writes, "Any and

6 all other versions of documents outstanding need

7 to be deleted." He also writes, "I also need

8 confirmation from you that you are not keeping

9 any of these documents or other Long Leaf material

10 outside of Long Leaf provided accounts."

11 Do you have any knowledge or

12 understanding of why Mr. Evans was asking you to

13 send him all LLTG scripts?

14 A I have no recollection.

15 Q All right. Do you have any knowledge

16 or understanding of why Mr. Evans says that any

17 and all other versions of documents outstanding

18 need to be deleted?

19 A No.

20 Q Do you recall deleting any --

21 or I guess shredding or destroying any scripts

22 or any other promotional documents at Long Leaf?

23 A No.

24 Q No, you didn't do it or no, you don't

Page 280

1 remember? Sorry.

2 A No, I don't remember.

3 Q All right. Do you have any knowledge

4 or understanding of why Mr. Evans asked you for

5 confirmation that you're not keeping any of these

6 documents, you know, at home?

7 A No, I have no recollection.

8 Q All right. Do you recall any

9 subsequent conversations with Mr. Evans about his

10 request for these scripts or that certain scripts

11 be deleted?

12 A No.

13 Q Do you know if this was -- this

14 email was sent prior to an NFA audit of Long Leaf

15 Trading?

16 A I have no -- I don't recall this email

17 at all.

18 Q Okay. Did you in fact have any scripts

19 or promotional materials at home?

20 A No.

21 Q Let's put that one aside, if we could,

22 please.

23 A (Witness complies).

24

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 277 - 280

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 73 of 115 PageID #:2120
Page 281

1 (Whereupon CFTC Exhibit No. 140

2 was marked for identification.)

3 Q Mr. Ruth, I want to hand you what I've

4 marked as CFTC Exhibit 140. And take a moment to

5 look it over, please, and let me know if you recall

6 it.

7 MR. MAY: Do we have any idea about the

8 length of this one? It's not consecutively

9 Bates stamped.

10 MR. BURDEN: Once again, it kind of is.

11 Remember we'd said last time about control

12 numbers?

13 MR. MAY: Right. To me it appears to

14 be about 75 pages.

15 MR. BURDEN: Yeah, it's an email and

16 its attachments.

17 MR. MAY: My pen just ran out of ink.

18 MR. BURDEN: Could we go off the record,

19 please.

20 (Discussion off the record.)

21 MR. BURDEN: Okay. Back on the record,

22 please.

23 MR. MAY: Are you done reviewing it?

24 THE WITNESS: Yes.

Page 282

1 MR. BURDEN: Ready to go?

2 MR. MAY: Yeah.

3 BY MR. BURDEN:

4 Q All right. Mr. Ruth, do you recognize

5 C F T C Exhibit 140?

6 A No.

7 Q All right. So you'll see it purports to

8 be an email from jruth@longleaftrading to Tim Evans

9 dated January 23, 2017. And jruth@longleaftrading

10 was your email address at Long Leaf, correct?

11 A Yes.

12 Q All right. And do you see the subject

13 is Emailing Time Means Money Documents and then

14 there's a zip file attached to it? And the contents

15 of the zip file I will warrant you are the documents

16 that are appended to the cover email in Exhibit 140.

17 Do you recall sending this email, Mr. Ruth?

18 A No.

19 Q All right. So you looked over the

20 documents in Exhibit 140, right?

21 A Correct.

22 Q All right. So what are these documents,

23 please.

24 A These documents are the approved

Page 283

1 documents from our compliance department to use in

2 the solicitation for Time Means Money.

3 Q Got it. And so were these documents that

4 you used in connection with your own solicitations?

5 MR. MAY: Do you have a time frame that

6 you were going to ask him about?

7 BY MR. BURDEN:

8 Q During any period that you worked at

9 Long Leaf Trading.

10 A Yeah, I guess my -- I don't know if I'm

11 answering your question, but my role is to utilize

12 the program solicitation documents that are approved

13 by the compliance department.

14 Q And did you do that?

15 A Yes.

16 Q And you'll have to forgive me if

17 I asked this question last time. But when you

18 refer to the compliance department at Long Leaf

19 Trading, who was that, please.

20 A Tim Evans.

21 Q Anybody else?

22 A No.

23 Q All right. So did you share any of these

24 documents in Exhibit 140 with NFA?

Page 284

1 A I wouldn't do that. That's the compliance

2 department's job.

3 Q And by compliance department you mean

4 Mr. Evans?

5 A Yes.

6 Q All right. So do you know if Mr. Evans

7 ever showed these documents to NFA?

8 A I don't know.

9 Q All right. Let's put 140 aside, if we

10 could, please.

11 A Are we trying to infer that 139 is a

12 response -- or, sorry, 140 is a response to 139?

13 Q Is it?

14 A I've never seen this 139, nor have

15 I ever seen this 140. I mean, I'm not saying I

16 haven't seen like the document. I'm talking about

17 like the actual emailing of these two things so ...

18 But I'm just curious if that's what you're -- I

19 mean, if you look at this, the 16th and the 23rd.

20 I don't think I would take, me personally would

21 take six days to respond to a superior's request

22 for information. So, I mean, that's just not my

23 style.

24 Q So since we're back on 140, do you

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 281 - 284

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 74 of 115 PageID #:2121
Page 285

1 recall where you obtained these solicitation

2 documents from that you forwarded to Mr. Evans or

3 that the email reflects that --

4 A Yeah. Again, like I don't think

5 I sent this email and I don't think I received

6 this. But these documents, like the reason why

7 this doesn't also make sense to me is because

8 these documents are in the shared folder like in

9 Office 365. So I don't get this whole --

10 Q So you think you didn't send Exhibit 140?

11 A No.

12 Q So why?

13 A Because why would I send something that's

14 already in a shared folder?

15 Q So other than that, do you have any

16 reason to believe that you didn't send 140, that

17 it's a fake document or that maybe that somebody

18 else sent it?

19 A I mean, reading 139, to me -- I don't

20 know why -- but this looks like a CYA type email

21 that was sent.

22 Q By whom?

23 A By Tim Evans and --

24 MR. MAY: Could you -- I'm sorry.

Page 286

1 Could you state for the record what CYA --

2 what you mean by when you say CYA?

3 THE WITNESS: Like cover-your-ass type

4 email.

5 MR. MAY: Okay.

6 A That's what it looks like to me. And

7 like he has all this -- like it doesn't make sense

8 because he has all this information because he's the

9 one who approves it. So --

10 MR. MAY: So there's no reason for him

11 to --

12 THE WITNESS: Yeah.

13 A And I don't recall ever seeing this

14 email. I don't recall ever sending that, and

15 he's the only one who has access to my email,

16 which we've talked about before.

17 BY MR. BURDEN:

18 Q Yeah. You can put those aside, if you

19 would, please.

20 A (Witness complies).

21 (Whereupon CFTC Exhibit No. 141

22 was marked for identification.)

23 Q All right. Mr. Ruth, I want to hand

24 you what I've marked as CFTC Exhibit 141. Take

Page 287

1 a moment to look it over and tell me when you've

2 looked it over, please.

3 A What are these red things that are marked?

4 Q Oh, you know what? I gave you my

5 copy. But you know what, I think you should hang

6 on to it because I think the little red tabs will

7 help us.

8 A All right.

9 MR. MAY: Can I see your version?

10 MR. BURDEN: I don't know that I'm going

11 to ask about the tabbed ones. But if you want

12 to tab them, you can.

13 MR. MAY: Yeah, I was going to.

14 I should have picked a different color tab.

15 Okay.

16 BY MR. BURDEN:

17 Q All right. Mr. Ruth --

18 MR. MAY: We're ready.

19 BY MR. BURDEN:

20 Q -- do you recognize CFTC Exhibit 141?

21 A Yes.

22 Q Can you tell me what it is, please.

23 A Well, I'd like to correct that.

24 I recognize the attachment, but I don't -- I guess

Page 288

1 this is an email being sent.

2 Q All right. And it appears to have

3 been sent from jruth@longleaftrading.com, right?

4 A Correct.

5 Q All right. To Tim Evans, right?

6 A Yes.

7 Q So do you remember sending this email?

8 A No.

9 Q All right. But you do recognize the

10 attachment, which is this Custom Version 3 Power

11 Point, right?

12 A Yes.

13 Q All right. So what's the Custom Version 3

14 Power Point, please.

15 A It's the visual Power Point for the

16 custom portion of the solicitation process for the

17 Time Means Money program.

18 Q So this is something that you would

19 show to clients or prospective clients as part of

20 your presentation, correct?

21 A Yes.

22 Q All right. Did you draft or create this

23 Power Point we see?

24 A No.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 285 - 288

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 75 of 115 PageID #:2122
Page 289

1 Q Who did, please.

2 A Some guy in India.

3 Q What makes you say that?

4 A He outsourced it to some guy in India.

5 Q Do you remember the guy's name?

6 A No. He's like a designer that you find

7 like on like a website.

8 MR. MAY: And who's "he"? You said he

9 outsourced it.

10 THE WITNESS: Tim Evans.

11 BY MR. BURDEN:

12 Q All right. Did this person from

13 India to whom the Power Point presentation was

14 outsourced, did this person email the presentation

15 to you?

16 A No.

17 Q So why is this -- do you recall why

18 you were sending this presentation to Mr. Evans?

19 A No clue.

20 Q All right. So let's take a look, if

21 we could, please, at a part of the presentation.

22 I want to go sort of to the end, and I bet there's

23 a red tab on it. And it's the page that says

24 Portfolio Management and there's a win column

Page 290

1 and a lose column.

2 A Um-hmm.

3 Q I think it's the fourth from the end,

4 if you would, please.

5 A I'm ready.

6 MR. MAY: Yes, ready as well.

7 BY MR. BURDEN:

8 Q All right. So, Mr. Ruth, this portfolio

9 management page -- what are you looking at there?

10 It looks like you've got a different exhibit.

11 A Yeah, Exhibit 140.

12 Q Oh, well, let's just look at Exhibit 141,

13 if we could, please.

14 A Yep.

15 Q And if there's something you want to

16 talk about with Exhibit 140, we can just go right

17 back to that.

18 A All right.

19 Q All right. So let's look at Exhibit 141,

20 if we could, please. We're on the fourth page from

21 the end. It says Portfolio Management. It says

22 Win 500, 500, 500 and then it totals to 1500 and

23 then it says Lose 1,000. That totals to 1,000 and

24 then there's an equation at the bottom. What's

Page 291

1 going on here, please.

2 A What do you mean by that?

3 Q Well, this is something that you would

4 show to clients, correct?

5 A Yes.

6 Q So is this meant to show that Long

7 Leaf expects or anticipates that they'll win three

8 out of four trades?

9 A No.

10 Q What's it meant to show?

11 A It's talking about the -- it's visualizing

12 that goes along with the words the amount of money

13 that you -- the 1:2 risk-to-reward ratio.

14 Q Got it. So what would you say to

15 clients when you showed them this, or prospective

16 clients when you showed them this particular slide,

17 please.

18 A What's ever on the customer --

19 Q Well, let's pretend on a client's, if you

20 would, please.

21 A I would have to go to Exhibit 140 in order

22 to tell that you.

23 Q Okay, great. Let's do that. Very good.

24 And is that because 140 reflects a script that

Page 292

1 accompanied this slide show?

2 A Yes. It says right -- yeah. So let's

3 say based on the risk preferences, a person who

4 owned --

5 MR. MAY: Are you reading from Exhibit 140?

6 THE WITNESS: Yeah.

7 MR. MAY: But these numbers -- these

8 documents aren't sequentially Bates stamped,

9 so we all can't be on the same page as you

10 very easily.

11 MR. BURDEN: I don't need to be. And,

12 Mr. May, take whatever time you need to get

13 on the same page as Mr. Ruth.

14 MR. MAY: Okay. Well, you know, I think

15 we're about at the hour mark. We still don't

16 have any water.

17 MR. BURDEN: Would you like water?

18 MR. MAY: Yeah, I would love it.

19 MR. BURDEN: Well, why don't we

20 quickly finish this question and you can

21 do your pitch and I'll secure some water for

22 both of you.

23 MR. MAY: Okay. So let me see if

24 I can't find Exhibit 140 so we're all looking

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 289 - 292

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 76 of 115 PageID #:2123
Page 293

1 at the same page.

2 MS. STREIT: What's the Bates number

3 at the bottom, the last two digits? Then you

4 can find it.

5 THE WITNESS: 27.

6 MS. STREIT: It says Conclusion on it?

7 THE WITNESS: No.

8 MS. STREIT: No, okay.

9 MR. MAY: Is there a question pending?

10 I don't think there is.

11 BY MR. BURDEN:

12 Q Yes. The question was, Mr. Ruth, if you

13 would, please, deliver me the pitch that you would

14 deliver to a client along with the fourth slide from

15 the end in Exhibit 141.

16 A Yeah. I mean, I think it's --

17 THE WITNESS: Am I allowed to go there?

18 MR. MAY: If you want to.

19 A Let's just say based on the risk

20 preferences of a person who owns this hypothetical,

21 yeah, theoretical portfolio we're talking about,

22 that would have us bring in $500 per position.

23 That would mean each position had a maximum outlay

24 of $1,000 worst case scenario. If we design our

Page 294

1 positions --

2 MR. MAY: She's got to take down

3 everything that you're saying, so you've got

4 to read it not like you're talking to somebody.

5 You have to read it very slowly so she can take

6 it all down, so very slowly. So maybe we should

7 just start from the beginning.

8 THE WITNESS: I mean, can't we just

9 reference G and H and then just write it in?

10 Do I have to say it?

11 MR. MAY: Yeah, that would be fine.

12 BY MR. BURDEN:

13 Q Say it, if you would, please.

14 A All right. So let's say based on

15 the risk preferences of a person who owns this

16 theoretical portfolio we are talking about, would

17 have us bring in $500 per position. That would

18 mean that each position had a maximum outlay of

19 $1,000 worst case scenario. If we design our

20 positions to bring in $500 and we've already

21 determined the maximum amount of risk exposure

22 that we're ultimately going to take on is $1,000

23 per position because 1:2 is the worst risk parameter

24 we can accept.

Page 295

1 Q All right. So let's look at the bottom

2 of this portfolio management slide in Exhibit 141,

3 please. So it says $500 times 12 equals 6,000.

4 Is this meant to communicate to clients that for

5 a hypothetical portfolio of the type you describe,

6 they can expect to receive $6,000 a year?

7 A No.

8 Q What's it meant to communicate to clients,

9 please.

10 A In the event that you win three

11 and lose one position on a monthly basis in a

12 hypothetical situation, that -- and you have a

13 1:2 risk-to-reward ratio and all the assets are

14 equally weighted, in this hypothetical situation

15 then you would win $500 per month. And if you

16 carry that on every single month perfectly in

17 a hypothetical situation, you would make $6,000

18 a year.

19 Q All right. Now, were there any

20 real clients that you're aware of who achieved

21 results such as this at Long Leaf Trading?

22 MR. MAY: I'm sorry.

23 A There's no --

24 MR. MAY: I'm sorry. Hold on. Didn't

Page 296

1 you ask him this last time?

2 MR. BURDEN: I don't know, but we're

3 going to ask him again.

4 MR. MAY: Okay. We can keep asking,

5 but I think he's answered it.

6 A It has nothing --

7 MR. MAY: I'm sorry. Could you read back

8 the question.

9 (Whereupon the portion of the record

10 was read as requested.)

11 A It's not applicable to this situation.

12 BY MR. BURDEN:

13 Q Why do you say that?

14 A Because what you're -- real results

15 and what this is talking about, this is talking

16 about a hypothetical situation. It has nothing to

17 do with the program.

18 Q Well, set aside Exhibit 141, if you

19 would, please, and just let me ask you the question

20 were there any clients of yours at Long Leaf that

21 made $6,000 in investment income in a year in --

22 let me finish.

23 MR. MAY: Yeah. You can't answer

24 his question until he's done asking it.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 293 - 296

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 77 of 115 PageID #:2124
Page 297

1 BY MR. BURDEN:

2 Q -- in 12 months from Long Leaf Trading?

3 A It's not applicable. It has no --

4 either you're not understanding what is being said

5 here or --

6 Q Well, I want to get away from

7 Exhibit 141 because I hear what you're saying

8 and I understand. But I'm asking you a separate

9 question, which is did you have any clients that

10 made $6,000 in profit over the course of a year at

11 Long Leaf Trading?

12 A It's possible.

13 Q Okay. What were the names of those

14 clients, please.

15 A I don't recall.

16 MR. BURDEN: I'll tell you what.

17 Let's take a break then, if we could, please.

18 I'll fetch you guys some water.

19 (Whereupon a recess was taken from

20 10:30 a.m., to 10:55 a.m., after

21 which the following proceedings

22 were had:)

23 MR. BURDEN: Back on, please, Mary.

24 Thanks.

Page 298

1 (Whereupon CFTC Exhibit No. 142

2 was marked for identification.)

3 Q All right. Mr. Ruth, I want to hand

4 you what I've marked as CFTC Exhibit 142. Take

5 a moment to look over the document, please, and let

6 me know when you're finished.

7 A I'm ready.

8 MR. MAY: I'm ready as well.

9 BY MR. BURDEN:

10 Q Mr. Ruth, do you recognize the documents

11 we've marked as CFTC Exhibit 142?

12 A No.

13 Q All so. Did you and Mr. Evans while

14 you were working at Long Leaf Trading use a chat

15 system in the office?

16 A Possibly.

17 Q All right. So I want to show you this

18 document and ask you some questions about it. It

19 says here -- it says Jeremy Ruth 1:13 p.m., and it

20 reflects a chat that says -- and I'm skipping ahead

21 in the chat. It essentially says that a customer

22 "was looking for a track record and you were trying

23 to give him live rec's instead. Did you send

24 anything to him?" And Mr. Evans writes, "No, we

Page 299

1 don't do track records," and you wrote, "Understood.

2 How are we going to approach him from here on out?"

3 And then Mr. Evans appears to write, "Same as all

4 customers. We will have to present him new trade

5 rec's as they come out."

6 Do you recall any discussions

7 with Mr. Evans about providing track records to

8 customers?

9 A No.

10 Q All right. Did you ever provide a track

11 record to any customer of yours?

12 A Not that I recall.

13 Q Was that pursuant to a policy at Long Leaf

14 Trading?

15 A Yes, I guess.

16 Q Why do you say that?

17 A Well, there is no track record for what

18 we do.

19 Q Why do you say that?

20 A Because it doesn't meet the requirements

21 from like either the CFTC or NFA in regards to track

22 records, the style of trading.

23 Q All right. So when you say it doesn't

24 meet the requirements for the CFTC, what do you

Page 300

1 mean? What requirements are you referring to?

2 A I don't know. I think like it has --

3 you know, everybody has to be doing the same thing

4 or the same -- I think it more applies to like CTAs

5 and CPOs than what we were doing.

6 Q So this CFTC requirement that you're

7 discussing, did you ever read that requirement, that

8 regulation?

9 A About track records?

10 Q Sure.

11 A Yeah, I think it's in -- I don't know

12 if it's a CFTC thing. Maybe it's an NFA thing.

13 I'm not quite sure, but I've read something about

14 it.

15 Q All right. And where did you read

16 that? Like did you read it at work or somewhere

17 else?

18 A Yes.

19 Q Was this something that Mr. Evans showed

20 you?

21 A No. I think it was -- I read it in

22 preparation for the Series 3.

23 Q Okay. Well, let's set aside your

24 interpretation of track record for a moment, and

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 297 - 300

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 78 of 115 PageID #:2125
Page 301

1 I'll ask did you ever provide any of your customers

2 with historical trading results for Long Leaf

3 customers?

4 A Not that I recall.

5 Q So why not?

6 A Why did I not do it?

7 Q Yeah.

8 A Because, I don't know, past performance

9 isn't indicative of future performance. I don't

10 think it benefits you.

11 Q Why don't you think it benefits

12 a person to know what a firm's previous trading

13 history did for their customers?

14 A Because you can't -- there's no indication

15 it's going to happen in the future.

16 Q But don't you think it would be relevant

17 to customers to know if a firm had no track record

18 or if the historical results for customers was bad?

19 Do you think that would be important to a customer?

20 MR. MAY: That's --

21 A I don't --

22 MR. MAY: Hold on. There's two

23 questions pending. Do you want me to have

24 the court reporter read it back to you because

Page 302

1 I think it's a compound question. So you

2 might be a little confused.

3 BY MR. BURDEN:

4 Q Are you confused?

5 A I'm not confused. You're on both

6 sides of the fence. You're telling me that you

7 don't want me to send out a track record, and then

8 now you're saying why don't you send out a track

9 record.

10 Q No, no, no, I'm not telling you anything.

11 A Yeah, you are.

12 Q I'm just asking you questions.

13 MR. MAY: Don't look for any implicit

14 meaning. Just answer his questions, okay?

15 A I have no comment.

16 BY MR. BURDEN:

17 Q All right. Was there a policy at

18 Long Leaf to not provide customers with historical

19 trading results?

20 A I can't answer that because there

21 is not historical trading results because it's

22 individualized for each individual person. So

23 there's not -- some people have different strikes.

24 Some people have different, you know, premium

Page 303

1 collection and things of that nature. So there

2 isn't like a set standard for what is going on.

3 So like the question just doesn't apply to those

4 situations.

5 Q Well, you see why I'm asking

6 this question because, you know, it appears

7 i n Exhibit 142 like you were asking to provide

8 a customer with a track record. And it sounds

9 like Mr. Evans says -- in fact he writes here, no,

10 we don't do track records. Do you recall any

11 discussions with Mr. Evans about that?

12 A I don't think that's what this says

13 at all.

14 Q What do you think it says?

15 A It says Harry Kaplan -- I think I'm

16 memorializing a conversation with him.

17 Q Got it, okay. So what are you

18 memorializing then, please.

19 A That Harry Kaplan was a guy that he

20 talked to that wouldn't let you do a real demo

21 and requested that you send him information, was

22 looking for a track record and you were trying to

23 give him live rec's instead. Did you send him

24 anything.

Page 304

1 Q And so how does Mr. Evans respond in

2 Exhibit 142?

3 A "No, we don't do track records."

4 Q Do you have any understanding of why

5 Mr. Evans would say that?

6 A Why?

7 Q Yeah.

8 A I mean, you've got to understand I've

9 been a licensed commodity broker here for like

10 30 days. So I think I'm just like learning what's

11 going on.

12 Q Okay. So it sounds like you don't know

13 why he said that?

14 A I'm asking him how we're supposed to

15 proceed with soliciting this customer, potential

16 customer.

17 Q Got it. And did you ever talk

18 to Mr. Evans about providing track records to

19 customers?

20 A No.

21 Q Why not?

22 A Because you -- we don't -- from a

23 solicitation standpoint and the program doesn't fit

24 the requirements to be able to lawfully or within

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 301 - 304

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 79 of 115 PageID #:2126
Page 305

1 regulations provide a track record.

2 Q Did you consult an attorney about that

3 question?

4 A Me? No.

5 Q All right. Let's put this one aside,

6 if we could, please.

7 A (Witness complies).

8 (Whereupon CFTC Exhibit No. 143

9 was marked for identification.)

10 Q I want to hand you what I've marked as

11 C F T C Exhibit 143, and take a moment to look it over,

12 if you would, please.

13 A I'm ready.

14 Q All right. Mr. Ruth, do you recognize

15 C F T C Exhibit 143?

16 A No.

17 Q All right. So I'm going to ask you

18 some questions about it anyway. Do you recall

19 this exchange?

20 A No.

21 Q All right. Exhibit 143 reflects that

22 Jeremy Ruth at 8:48 a.m. on November 4, 2015 writes,

23 "Any word on my grandpa's check?" And it looks like

24 this is a series of messages with Mr. Evans. Do you

Page 306

1 know what this might be referring to?

2 A I don't recall.

3 Q Did your grandpa, your grandfather invest

4 with Long Leaf Trading?

5 A No. He had an account at Long Leaf

6 Trading.

7 Q Sorry. He did?

8 A Yeah, he was a customer.

9 Q Oh, what was your grandfather's name,

10 please.

11 A Mike Bruno.

12 Q Did you have any other family members

13 that had accounts at Long Leaf Trading?

14 A No.

15 Q How did your grandfather's account perform

16 at Long Leaf Trading?

17 A I don't recall.

18 Q Did you not talk to your grandfather

19 about it?

20 A I just don't recall. This was four years

21 ago.

22 Q Do you know how much Mr. Bruno invested?

23 A I don't know. Maybe $5,000.

24 Q All right. And how much of that did

Page 307

1 Mr. Bruno get back when he closed his account?

2 A I don't recall.

3 Q Were you Mr. Bruno's broker?

4 A Yes.

5 Q All right. And did Mr. Bruno trade

6 pursuant to the Time Means Money program?

7 A I don't recall.

8 Q Did you give your grandfather any special

9 recommendations?

10 A I don't recall.

11 Q Where does your grandpa live?

12 A My grandpa's deceased.

13 Q I'm sorry to hear that. Did you have

14 any other family members that invested with Long

15 Leaf Trading?

16 A No.

17 Q Did you invest with Long Leaf Trading?

18 A When you say "invest with," what do you

19 mean by that?

20 Q Yeah. I guess the right way to put

21 it is did you give any of your money to Long Leaf

22 Trading to trade pursuant to the Time Means Money

23 program?

24 A No.

Page 308

1 Q All right. So let's look at the

2 second line of Exhibit 143, please. Jeremy Ruth

3 writes, "Also, can I get a performance statement

4 to go over with Art Rieck?" Do you know who Art

5 Rieck is?

6 A No.

7 Q Let's put this one aside, if we could,

8 please.

9 A (Witness complies).

10 Q Who is Luis Molina?

11 A He's a broker at Long Leaf. I think

12 it's Luis, though.

13 Q Oh, thanks. So was he a junior broker

14 or a senior broker, please.

15 A I don't know his title.

16 (Whereupon CFTC Exhibit No. 144

17 was marked for identification.)

18 Q All right. I want to hand you what

19 I've marked as CFTC Exhibit 144. And take a look

20 at it, please, and tell me when you're done looking

21 at it.

22 MR. MAY: Are you ready, Jeremy?

23 THE WITNESS: Yes.

24

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 305 - 308

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 80 of 115 PageID #:2127
Page 309

1 BY MR. BURDEN:

2 Q So, Mr. Ruth, I want to direct

3 your attention to the second numbered item on

4 Exhibit 144. If you look at the top, Mr. Molina

5 writes -- it says, "Write three questions you have

6 about Time Means Money, any investment vehicle,

7 geopolitical issues, politics, market correlations,

8 historical events, et cetera," and then it looks

9 like he's writing three questions here.

10 Did you ask Mr. Molina to write these

11 three questions?

12 A No.

13 Q Do you have any knowledge or

14 understanding of why he would have written these

15 questions to you rather than, you know, somebody

16 else?

17 A I think if I recall, I don't know

18 specifically, but we would have like a morning

19 meeting. And I think he is giving me questions

20 to -- and I would put questions together from

21 everybody to then ask Tim Evans so that he could

22 like explain the stuff to people.

23 Q Got it. So the second item here

24 Mr. Molina writes, "I had a prospect yesterday

Page 310

1 that insisted on a track record. I explained

2 to him that past performance is not indicative of

3 future performance. Also, that everything we do

4 here is custom to each individual, so everyone's

5 return is different. He said he is looking for

6 consistency and without a track record, wouldn't do

7 business. What would be a better way to approach

8 this?" Do you recall answering this question?

9 A No.

10 Q Do you remember what Mr. Evans'

11 answer was to this question, if he answered it?

12 A I don't recall.

13 Q All right. Let's put that one aside,

14 if we could, please.

15 A (Witness complies).

16 (Whereupon CFTC Exhibit No. 145

17 was marked for identification.)

18 Q All right. I want to hand you what

19 I've marked as CFTC Exhibit 145, and let me know

20 when you're ready to talk about this, please.

21 A I'm ready.

22 Q All right. Mr. Ruth, do you recognize

23 C F T C Exhibit 145?

24 A No.

Page 311

1 Q All right. Who's James Hatzigiannis?

2 A He's a broker at Long Leaf.

3 Q All right. So Exhibit 145 appears to be an

4 exhibit from Mr. Hatzigiannis to you and Mr. Prieto,

5 and the subject is Super Team Assignment. Do you

6 have any knowledge or understanding of what super

7 team refers to?

8 A Don't recall.

9 Q All right. So Mr. Hatzigiannis

10 begins the email by addressing it to you and to

11 Vince, and there's some questions at the bottom

12 and I want to focus in on the last question here.

13 So Mr. Hatzigiannis writes, "If someone says

14 I won't set the appointment unless you tell me

15 your annual return, do we tell him or just not set

16 him?" Did you respond to this question?

17 A I don't recall.

18 Q Do you recall if anybody else, such as

19 Mr. Prieto, responded to this question?

20 A I don't recall.

21 Q All right. So, you know, we've

22 been sort of going back and forth about your

23 definition of track record and why you feel like

24 it's not applicable. So I think this might be a

Page 312

1 good jumping-off point to find some common ground

2 on that. Mr. Hatzigiannis talks here about an

3 annual return.

4 Did you ever provide an annual

5 return or average annual return for customers

6 in the Time Means Money program to anybody you were

7 soliciting?

8 A Not that I recall.

9 Q Why not?

10 A Because it's not appropriate.

11 Q Why do you think that?

12 A Because I'm a -- well, I was a licensed

13 commodity broker and it's not appropriate.

14 Q But what is your basis for saying that

15 it's not appropriate?

16 A I don't know. Everything in that book

17 probably tells you not to.

18 Q What book are you referring to?

19 A The CFTC Exchange Act, the Commodity

20 Futures Exchange Act.

21 MR. MAY: Which color book are you

22 referring to?

23 BY MR. BURDEN:

24 Q What --

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 309 - 312

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 81 of 115 PageID #:2128
Page 313

1 MR. MAY: Well, no. That actually is

2 a real question because there are two books

3 over there.

4 THE WITNESS: Both of them.

5 MR. MAY: Okay.

6 BY MR. BURDEN:

7 Q All right. So what provisions

8 of the Commodity Exchange Act or accompanying

9 regulations do you believe make it inappropriate

10 to share average annual returns of customers

11 participating in the Time Means Money program?

12 A Well, I don't know specifically

13 like what sections of the Act or anything of

14 that nature, but there is no average annual return

15 because everybody does -- not everybody has the same

16 trades. And, furthermore, you have people coming in

17 and out of the program at different times and things

18 of that nature so ...

19 Q Well, you had suggested before

20 that you think that there's something in the Act

21 or the regs that would prohibit you from sharing

22 customer returns. Is that what you're getting at?

23 A That would prevent you from sharing

24 customer returns?

Page 314

1 Q Yeah.

2 A Yeah. It's my understanding that

3 there's certain things that have to I guess

4 qualify in order for you to be able to put together

5 some sort of document that shows what your annual

6 return is.

7 Q Okay. So --

8 A And this program and the way that

9 it's run and the customers that are involved and the

10 results, they don't fit in any of the requirements

11 needed to qualify to be able to do so.

12 Q So where did you get that idea from?

13 Did somebody tell you? Did you read it?

14 A The internet, speaking with people.

15 Q Who did you speak with?

16 A Tim Evans.

17 Q Okay. What else? Sorry I interrupted you.

18 A I don't know. Just, again, studying

19 for the Series 3 from like a textbook. I think it

20 says it on like some sort of disclosures and things

21 of that nature. I don't know. It's -- a lot of

22 places.

23 Q All right. Did you consult any attorneys

24 about that?

Page 315

1 A No, I -- the compliance officer at my

2 firm told me that.

3 Q And that's Tim Evans?

4 A Yes.

5 Q So Tim Evans told you that you were

6 forbidden from providing average rates of return

7 for customers participating in the Time Means Money

8 program?

9 A I don't know if he said that

10 specifically, but essentially giving people results

11 is not something -- we don't meet the requirements

12 in order to be able to do so.

13 Q Okay. Did Mr. Evans tell you this in

14 like an email or a chat?

15 A I don't recall.

16 Q Do you know when he --

17 A Actually, I can tell you one time he

18 told me. Going back to Exhibit 142 it says, "No,

19 we don't do track records," on 6/1/2015 at 1:22 p.m.

20 Q No. Yeah, I understand. We talked about

21 that one.

22 A Well, that's an example -- that answers

23 your question.

24 Q Well, what I'm interested in is when

Page 316

1 Mr. Evans told you that this was precluded by the

2 CFTC Act or regs.

3 A I don't know specifically. This is four

4 to -- two to four years ago.

5 Q All right. Do you remember if it was a

6 conversation in person?

7 A I don't recall.

8 Q Was anybody else present during --

9 A I don't recall.

10 Q -- that conversation? You've got to

11 let me finish, if you would, please. Was anybody

12 else present during the conversation?

13 A I don't recall.

14 Q All right. Let's put that one aside,

15 if we could, please.

16 A (Witness complies).

17 Q All right. Mr. Ruth, I want to hand you

18 what I've marked as CFTC Exhibit 110.

19 MR. MAY: 110? Did we use -- is

20 this one of the ones you used last time?

21 MR. BURDEN: No.

22 Q So take a look at it for me, if you

23 would, please, and tell me when you're ready to

24 proceed.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 313 - 316

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 82 of 115 PageID #:2129
Page 317

1 MR. MAY: Are you ready, Jeremy?

2 THE WITNESS: Yes.

3 BY MR. BURDEN:

4 Q Mr. Ruth, do you recognize CFTC

5 Exhibit 110?

6 A No.

7 Q All right. So if we look at CFTC

8 Exhibit 110, the first email in the chain purports

9 to be from Jeremy Ruth. It's dated April 27, 2017

10 to Mr. Leeney and Mr. Prieto and the subject is

11 Calls to Review and the email reflects Jeremy

12 Ruth writing, "Bros, here are some calls I think

13 are worth the listen," and then I guess it talks

14 about some calls. Was reviewing calls something

15 that you would do with other brokers at Long Leaf?

16 A What do you mean by reviewing calls?

17 Q Well, the calls that you made were

18 recorded, correct?

19 A Some.

20 Q And you understood that, right?

21 A That some were recorded?

22 Q Yeah.

23 A Yes.

24 Q Well, would you go back and listen

Page 318

1 to them by yourself with other brokers?

2 A At times.

3 Q All right. So do you know who Jerry

4 Krantz is?

5 A No.

6 Q All right. So in this email that

7 purports to be from Jeremy Ruth in Exhibit 110

8 it says, "Jerry Krantz: Broker Premier, started

9 from a Pierre fuck-up but the value in this call

10 is how to get around a request for a track record

11 and how to show empathy so he feels you understand

12 him." And you say, "Let me know if you have any

13 questions," and then Mr. Leeney responds, "Thanks,

14 Bra." So did you write this?

15 A It appears so.

16 Q All right. This suggests, or suggests

17 to me anyway, that there's value in getting around

18 a request for a track record and showing empathy.

19 What is that value?

20 A I don't agree with that statement.

21 Q Okay. Well, correct me, if you would,

22 please.

23 A I mean, I don't think you're -- what

24 did you say exactly?

Page 319

1 MR. MAY: Do you want to the court

2 reporter to read it back?

3 THE WITNESS: Yeah.

4 MR. BURDEN: You know what, I think

5 I can probably ask it a little bit better.

6 Q So what is the value in getting around

7 the request for a track record?

8 A I don't think -- I think you need to take

9 away the word value.

10 Q Okay. So --

11 A I think the value is in listening to

12 the call.

13 Q You say --

14 A I don't think the value is in getting

15 around a track record.

16 Q But it says, "The value in this call

17 is how to get around a request for a track record."

18 A Yeah. So it's referring to like from

19 a development standpoint that you can get value from

20 this call by learning how to get around a request

21 for a track record.

22 Q All right. But why is that valuable?

23 Like why is that a good thing that other brokers

24 would want to learn?

Page 320

1 A Because, I mean, you can't give out

2 a track record, and so a lot of people get stumped

3 by that question. And so how to get around it is by

4 telling them that you can't give out a track record

5 and being honest about it.

6 Q All right. Let's put this one aside then.

7 A (Witness complies).

8 (Whereupon CFTC Exhibit No. 146

9 was marked for identification.)

10 Q All right. Mr. Ruth, I want to hand

11 you what I've marked as CFTC Exhibit 146, and please

12 read the document and let me know when you've

13 finished reviewing it.

14 THE WITNESS: Are you ready?

15 MR. MAY: Not yet. Ready.

16 A Yes.

17 BY MR. BURDEN:

18 Q All right. Mr. Ruth, I want to ask you

19 if you recognize CFTC Exhibit 146.

20 A I don't.

21 Q All right. So I'm going to ask you

22 some questions about it anyway. So there's an

23 email here from Mr. Evans dated September 19, 2016

24 to the broker team. Were you a member of that

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 317 - 320

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 83 of 115 PageID #:2130
Page 321

1 broker team?

2 A It appears so.

3 Q All right. So Mr. Evans writes here,

4 "Going through the numbers, there are some obvious

5 and urgent changes that need to be made. First off,

6 the junior guys suck on the phone. This needs to

7 change and these guys need to know that they need

8 to. I did my best today with Mark, Brendan, Luis

9 and James to make them understand their performance

10 is shit and it needs to change now." Who are Mark,

11 Brendan, Luis and James?

12 A They're brokers at Long Leaf.

13 Q All right. What's Mark's last name,

14 please.

15 A Couldn't tell you.

16 Q What's Brendan's?

17 A Maybe Brendan Sears.

18 Q Luis is Luis Molina, correct?

19 A Yeah.

20 Q Yes?

21 A Yes.

22 Q And James is -- is that James Leeney?

23 A That's probably James Hatzigiannis.

24 Q Very good, thank you. So are these

Page 322

1 the junior guys that Mr. Evans is referring to?

2 A I believe so.

3 Q All right. So are there junior brokers

4 and senior brokers?

5 A Yeah, I guess.

6 Q So --

7 A It's like a team-based environment, yeah.

8 Q Got it. So why are Mark, Brendan, Luis

9 and James junior guys and you're a senior guy?

10 A I think it's just because I've been there

11 longer.

12 Q Is there a division of roles or was

13 there a division of roles between the junior brokers

14 and the senior brokers?

15 A Yeah. It was, like I said, a team-based

16 environment.

17 Q All right. So what did the junior

18 brokers do that the senior brokers didn't do?

19 A Nothing.

20 Q What did the senior brokers do that the

21 junior brokers didn't do?

22 A Communicate with clients and I guess

23 broker accounts, if you want to call it that.

24 Q Got it, okay. And the junior guys didn't

Page 323

1 do those things?

2 A Correct.

3 Q What did they do then? That seems like

4 the whole job.

5 A They would be the beginning stages of

6 the sales solicitation process.

7 Q Got it. And what are the beginning stages

8 real quick?

9 A Like setting up an initial appointment

10 through like a cold call and running what we call

11 like a demonstration.

12 Q Okay, thanks. So let's continue on

13 in this first paragraph in Exhibit 146. Mr. Evans

14 refers to the junior guys' performance as not being

15 good and he says, "But it is going to require

16 follow-through from you guys to make sure when

17 they come back to you as changes people" -- I think

18 that's a typo -- "that we go down a different path.

19 Let's get rid of the idea we are all pals. They

20 work for you. You pay them. They should do what

21 you tell them to do. Unless they are producing,

22 they are taking money out of your pocket and

23 putting it in theirs. This shit isn't supposed

24 to work like that, clearly."

Page 324

1 So Mr. Evans appears to write

2 here that you pay them. Did you pay junior brokers?

3 A I don't know how to explain this, but

4 like he paid them but he would deduct money from us

5 to pay them I guess or -- yeah.

6 Q So it didn't come out of your pocket?

7 A It did.

8 Q Okay.

9 A Technically. Like it would be on

10 your payout, though. It wasn't -- so I think like

11 maybe we went like half and half, so I think they

12 had like a set salary of like 1500 bucks a month

13 or something like that.

14 Q So did you have your own junior guys or

15 did everyone kind of share them?

16 A They kind of shared them I guess,

17 but I think his idea originally was we were supposed

18 to have our own. I don't think it worked.

19 Q So who was originally supposed to be yours?

20 A I don't know. I don't recall. I know

21 maybe Luis if I -- but then, I mean, I don't know.

22 I think I might have had them all. I don't know.

23 Q All right. So could you hire or fire these

24 junior brokers?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 321 - 324

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 84 of 115 PageID #:2131
Page 325

1 A I don't know.

2 Q Did you fire any of these junior brokers?

3 A I don't think so.

4 Q Were any of the junior brokers fired?

5 A What, like these four?

6 Q Any junior broker.

7 A Oh, I would assume, yeah.

8 Q Well, who?

9 A I don't know their names, but there

10 was other ones. I mean, I think you try to --

11 you know, you hire seven and like some guy doesn't

12 show up. I think he gets fired, you know,

13 something like that.

14 Q Well, did you fire anybody?

15 A I think -- if I recall, maybe one

16 time Tim had asked me to, you know, like pass

17 a message to somebody that they were no longer

18 working there. But I don't -- I mean, it wasn't

19 like I made that decision or anything of that

20 nature.

21 Q And who was it that you passed this

22 message to?

23 A What is this kid -- I don't remember what

24 the kid's name was.

Page 326

1 Q And was he a junior broker?

2 A Yeah.

3 Q All right. Did you get to hire any

4 junior brokers?

5 A No.

6 Q Did you get to interview any prospective

7 junior brokers?

8 A I would sit in like with Tim on interviews

9 sometimes.

10 Q Did you have like a say in who got hired,

11 like a vote or input?

12 A Not that I'm aware of.

13 Q Well, did you tell Mr. Evans who

14 you thought did well or didn't do well or who he

15 should hire or not?

16 A No.

17 Q So why did you sit in on the interview

18 then?

19 A I don't -- I mean, I don't know.

20 Q All right. Let's put this one aside,

21 if we could, please.

22 A (Witness complies).

23

24

Page 327

1 (Whereupon CFTC Exhibit No. 147

2 was marked for identification.)

3 Q All right. Mr. Ruth, I want to hand

4 you what I've marked as CFTC Exhibit 147. Let me

5 know when you've finished reviewing it, please.

6 MR. MAY: Are you ready, Jeremy?

7 THE WITNESS: Yes.

8 BY MR. BURDEN:

9 Q Mr. Ruth, do you recognize CFTC

10 Exhibit 147?

11 A No.

12 Q All right. So it's an email that appears

13 to be from you from jruth@longleaftrading.com to a

14 bunch of other people dated February 6, 2017.

15 Who is Michael Bauer, please.

16 A He was a broker at Long Leaf Trading Group.

17 Q All right. So all the guys in the To field

18 are brokers, correct?

19 A Yes.

20 Q All right. And the subject is Demo

21 Flake Attempting Reschedule New List. And the

22 email reflects that Jeremy Ruth is writing, "Team,

23 we have not been doing a good job resetting demos.

24 The resets are not of quality and they are not

Page 328

1 happening. To change this outcome I have created

2 a new dialer list for all of you to access entitled

3 'Demo Flakes - Be Relentless.'" Is this something

4 that you wrote?

5 A It appears so.

6 Q So this Demo Flakes Be Relentless dialer,

7 what's that, please.

8 A It's like a -- through the CRM you

9 can create lists for, you know, people to call.

10 Q And did you do that here?

11 A That's what it says, yeah.

12 Q All right. So jumping to the next

13 paragraph the email says that Mr. Ruth is writing,

14 "We need to hit this list and hit it hard. If

15 you are smart, you would go ham on this list sooner

16 rather than later. It's first come first served.

17 I'll be keeping stats on this list and making

18 adjustments to my strategy in regards to demo

19 flakes attempting reschedule based on those stats."

20 How did you keep track of these stats, please.

21 A I don't recall.

22 Q What adjustments did you make to the

23 strategy regarding demo flakes?

24 A I don't recall.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 325 - 328

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 85 of 115 PageID #:2132
Page 329

1 Q Was this program a success?

2 A I don't recall.

3 Q So why are you the guy that's

4 sort of taking charge of this attempt to reduce

5 demo flaking?

6 A Why am I?

7 Q Yeah.

8 A Well, it's a team-based environment.

9 So these guys set demos and if the people don't show

10 up, then I don't have anything to do. So I probably

11 wanted something to do.

12 Q All right. Let's put that one aside,

13 if we could, please.

14 A (Witness complies).

15 Q All right. So, Mr. Ruth, how were

16 your customers at Long Leaf Trading able to keep

17 track of the profit and loss from their trading?

18 A How were they?

19 Q Yeah.

20 A I would assume from their account

21 statements.

22 Q Okay. So the customers get account

23 statements from -- when you were there -- Gain,

24 right?

Page 330

1 A Yes.

2 Q All right. So did they get any kind

3 of statement from Long Leaf saying how they're

4 doing?

5 A No.

6 Q Why not?

7 A Because the official record of their

8 account is the account statement.

9 Q All right. Did customers express

10 confusion to you about the account statements they

11 received from Gain?

12 A Yes.

13 Q Was that a fairly frequent occurrence?

14 A I think it's a frequent occurrence for

15 everybody who has a futures account.

16 Q Why is that?

17 A Because the statements are confusing.

18 Q All right. You just saved yourself four

19 exhibits.

20 MR. MAY: Want to share them with me just

21 in case I want to use them?

22 MR. BURDEN: Yeah. I mean, they're

23 customers complaining about how the statements

24 are confusing.

Page 331

1 MR. MAY: Okay.

2 THE WITNESS: I don't think that's a me

3 issue or a Long Leaf issue, though.

4 MR. MAY: Yeah. I think you said it was --

5 THE WITNESS: Yeah.

6 BY MR. BURDEN:

7 Q So this is what I want to ask about.

8 I'm not allowed to have an opinion on this in

9 testimony, but you can imagine what it is since

10 everybody thinks that these Gain statements are

11 confusing and difficult to follow. And you think

12 that, right?

13 A I did at one time, yeah.

14 Q Yeah. But you get them now?

15 A Yeah.

16 Q But imagine if you're a retail

17 customer, it would be hard to make heads or tails

18 of. Do you think that's right?

19 A Yeah, I agree.

20 Q All right. So my question is why

21 didn't Long Leaf as a company -- I'm not talking

22 about you in particular necessarily, though we'll

23 get to that. So did you -- do you have an

24 understanding of why Long Leaf didn't tell clients

Page 332

1 sort of how they were doing on a day-to-day or

2 month-to-month or trade-by-trade basis?

3 A Well, the official record of the

4 account is the account statement. So I don't

5 think you're allowed to within regulations provide

6 them anything else besides their account statement

7 and --

8 Q So -- sorry.

9 A So they had daily statements.

10 They have access to a platform that can show

11 them I guess what's going on in real time.

12 I mean, there's many different ways that they

13 could obtain that information, and I think it's

14 the responsibility of the client to know what

15 they're doing as well.

16 Q All right. Well, let me ask you this.

17 Did you ever ask Mr. Evans why Long Leaf didn't

18 just tell customers how the trades did after they

19 closed?

20 A Did I ever ask him why?

21 Q Yeah.

22 A Not that I recall.

23 Q Did you ever wonder?

24 A I mean, I already know the answer,

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 329 - 332

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 86 of 115 PageID #:2133
Page 333

1 though. So --

2 Q What's the answer? What's the answer?

3 A You can't provide a client anything outside

4 of the account statement.

5 Q Why do you think that?

6 A Because I think that's the rules and

7 regulations call for that.

8 Q Well, what rules or regulations say that?

9 A I don't know specifically, but I know

10 it's somewhere in there.

11 Q All right. So is this something that

12 somebody told you? Did you find it yourself?

13 A I've -- in preparation for the Series 3,

14 I think I read about it. I've read about it in

15 other things. Look at -- reading NFA complaints

16 and decisions I get the impression that, you know,

17 people are giving false statements to clients.

18 I don't know. Reading about Bernie Madoff and

19 him providing false statements to his clients,

20 I think --

21 Q Well, I want to --

22 A -- it's pretty obvious that you

23 shouldn't give anybody anything except for the

24 official statement of their account, which is a

Page 334

1 statement provided by Gain Capital which is sent

2 to them.

3 Q So I want to push --

4 A And we confirm that they can open the

5 statements and that they've read statements and

6 things of that nature periodically throughout the

7 account.

8 Q So I want to push back on that a little

9 and explore. Certainly you can't provide customers

10 with false statements. You understand that, right?

11 A Yes.

12 Q But what about true statements

13 of how their trades did? Your testimony is that

14 you believe it's against the rules?

15 A Yes.

16 Q All right. What rules is it against?

17 A I don't know specifically.

18 Q Did somebody tell you it was against

19 the rules?

20 A Yes.

21 Q Who told you that?

22 A Tim Evans.

23 Q Anybody else?

24 A During the time period that we're talking

Page 335

1 about, no, that would be it.

2 Q All right. What about after the time

3 period?

4 A I mean, Ryan Griffith told me.

5 Q All right. And who's Ryan Griffith?

6 A He's an AP at Postrock Trading Group.

7 Q All right. Anybody else tell you that

8 you can't share true information with customers

9 about account performance?

10 A No.

11 Q All right. So when Mr. Evans

12 told you that you can't provide customers with

13 truthful information about how their trades did --

14 A Oh, that's not what I'm saying.

15 Q Okay. What are you saying?

16 A I'm saying that you can't make

17 a document, outside of their account statement,

18 and send it to them that has anything to do with

19 account performance.

20 Q Got it, okay. So did Mr. Evans tell

21 you that?

22 A Yes.

23 Q When did he tell you that?

24 A Since the day I started.

Page 336

1 Q All right. Well, am I going to find

2 any emails or texts or chats?

3 A I don't recall.

4 Q All right. Did he tell you this verbally?

5 A I don't recall.

6 Q Do you recall if there were other people

7 there when he told you this?

8 A A lot of times when things were

9 communicated of this nature, it would be like

10 senior brokers around. So it could be Tony Klancic,

11 Vince Prieto, James Leeney. I don't recall

12 specifically, but those would be the people.

13 Q Got it. Did you consult an attorney

14 with respect to this? Did you ever ask an attorney,

15 hey, is it okay to provide customers with things --

16 A No, I never had an attorney as an

17 AP. I have a compliance department. I go to

18 the compliance department. If I have any questions,

19 the compliance officer tells me that is the rule

20 of the law.

21 Q All right. And that compliance department

22 is Tim Evans, right?

23 A Yes.

24 Q Is Tim Evans an attorney, do you know?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 333 - 336

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 87 of 115 PageID #:2134
Page 337

1 A Not that I know of.

2 Q Did you ever call the NFA and ask if it

3 was okay to provide --

4 A No, it's not -- it's inappropriate

5 because it's -- again, I have an internal compliance

6 department. I go to the compliance department.

7 The compliance department tells me what to do.

8 Q So you never called the NFA and asked?

9 A No. It's not appropriate for an AP

10 to do that because an AP has a chain of command,

11 which is to go to your compliance department.

12 Q Well, I want to push back a bit

13 on this, your view that it's inappropriate,

14 or let's say explore it. So you think that it's

15 inappropriate for you to ask questions of the NFA

16 because there's a chain of command?

17 A Yes.

18 Q But do you think that the NFA would have

19 refused to answer your question?

20 A I don't even know if there's a form for

21 the NFA to answer my question as an AP.

22 Q Well, they have a phone number, right?

23 A Correct.

24 Q And they have a market regulation

Page 338

1 department that you're familiar with, correct?

2 A No, I'm really not. Do they actually

3 have one?

4 Q Well, you've recently been subject

5 I understand to some interviews by NFA, correct?

6 A Yes.

7 Q And do you know what division of the

8 NFA that was or what department?

9 A No clue. Is that who I would call,

10 though?

11 Q I can't answer your questions,

12 but I'll bet you can talk to your counsel about

13 it.

14 A All right.

15 (Whereupon CFTC Exhibit No. 148

16 was marked for identification.)

17 Q All right. Mr. Ruth, I want to show you

18 what I've marked as CFTC Exhibit 148. And please

19 review the document and indicate for me when you've

20 finished reviewing it. And I should have mentioned

21 148 is a group exhibit.

22 MR. MAY: I'll be ready in a few minutes.

23 Are you ready, Jeremy?

24 THE WITNESS: Yes.

Page 339

1 BY MR. BURDEN:

2 Q All right. Mr. Ruth, do you recognize

3 the emails in Group Exhibit 148?

4 A No.

5 Q So I want to ask you some questions about

6 them anyway. Let's turn, if we could, please, to

7 the second and third emails in the exhibit. I'm not

8 going to ask you about the first one. If you look,

9 there's an email from jruth@longleaftrading.com

10 dated June 22, 2017 to this odd string of characters

11 and numbers at route@ihance.net. Do you know what

12 that is?

13 MR. MAY: I'm sorry. Could you --

14 are you referring -- there's two emails

15 apparently to that email address. Are you

16 referring to the one at 12:21 p.m. or to the

17 one at 11:57 a.m.?

18 MR. BURDEN: Well, let's just say

19 12:21 p.m. because it's the same for both.

20 Q I just want to ask if you know what this

21 address is.

22 A No.

23 Q All right. So it says Subject:

24 Long Leaf Trading Group Position Update and it

Page 340

1 says Barry. Did you have a customer named Barry?

2 A Not that I recall.

3 Q All right. So let's look, if we

4 could, please, to the second paragraph. And I

5 want to focus on the last couple sentences in this

6 paragraph. And the email reflects that Mr. Ruth is

7 writing, "When we are holding positions and a market

8 turns unexpectedly, obviously it's not a good thing.

9 But when we are then reinitiating the portfolio,

10 we are now capturing that existing volatility with

11 higher premiums on our option sales. This is why

12 we tend to perform well coming out of these periods

13 where we take a loss." Did you write that?

14 A James Leeney wrote it.

15 Q Well, what does that mean?

16 A What do you mean?

17 Q Well, did he send this email? Did you

18 send the email?

19 A I think it's -- he writes -- I think

20 going back to the first one, he like writes these.

21 Q Yeah, so don't let this first one

22 trip you up. I'm not sure why I attached it to

23 the group exhibit. I'll just be honest with you --

24 A I know. But James Leeney -- like I don't

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 337 - 340

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 88 of 115 PageID #:2135
Page 341

1 do -- I wouldn't do market stuff.

2 Q Got it.

3 A So like he would write these emails

4 and then I would, you know, sometimes send it out

5 to the clients before I got on the phone with them.

6 Q All right. So now you'll see that

7 this email from Mr. Leeney to you, the first email

8 i n 148, it's dated June 23, 2017.

9 A Yeah.

10 Q And you're sending these out on the

11 22nd. I put these together, and maybe I shouldn't

12 have done. That's the nature of a group exhibit.

13 I just want to make sure that you're testifying from

14 memory and not because you're looking at my goofy

15 exhibit and trying to figure out what it means.

16 A Yeah. I'm not saying that this

17 specific -- this is an example of an email that

18 he would send to me and then I would take -- like

19 copy, you know, portions of --

20 MR. MAY: You're pointing to a page.

21 Perhaps we should identify which page in

22 G r o u p Exhibit 148 that you're pointing to.

23 BY MR. BURDEN:

24 Q All right. So I think I can help

Page 342

1 with this. So let's take a look, if we could,

2 please, at the --

3 MR. MAY: Well, I cut you off, Jeremy.

4 Did you want to keep going? I mean, I just

5 wanted you to clarify you were pointing to

6 the first page --

7 THE WITNESS: Yeah.

8 MR. MAY: -- of Group Exhibit 148.

9 A The email would have been sent by me.

10 The content of the email is written essentially

11 by James Leeney. This specific -- I'm not saying

12 that because of the, you know --

13 BY MR. BURDEN:

14 Q Got it, okay. That's what I'm making

15 sure of.

16 A Because of this email, but like this

17 type of language isn't -- it's not necessarily

18 mine.

19 Q Got it. All right. So looking at

20 this portion of Exhibit 148, it's Bates labeled

21 Long Leaf Trading 362715, and that's the email from

22 Jeremy Ruth sent June 22, 2017. So your testimony

23 is that you sent this email but Mr. Leeney wrote

24 the text?

Page 343

1 A Again, he sends like a blanket email

2 that's similar to the one on the first page, and

3 then I pick like a portion of it to put into my

4 message.

5 Q Got it. So is that Mr. Leeney's like

6 assigned job? Like why does --

7 A No, it was just --

8 Q -- he do that?

9 A This is like a month or two before

10 I left. And, you know, I believe we were getting

11 more concerns about like performance, and these are

12 trades that I didn't like design or I didn't have

13 anything to do with. So I'm just lending him

14 this like process of transferring information.

15 So I think it was more of he was assisting in that

16 because he's like the market guy I guess or next

17 in line to Tim.

18 Q All right. So when you talk about

19 concerns with performance I think you said, what

20 concerns did you have?

21 A I didn't have concerns.

22 Q So what are you talking about?

23 A Like a client would come to me and

24 ask me more questions. Like they were asking

Page 344

1 me deeper questions at the time about specifics

2 about the actual trade, and so I reached out to

3 other people to gather that knowledge because I

4 didn't have it firsthand because they're not my

5 trades.

6 Q Got it. So I want to point to this

7 last sentence -- I was going with this before --

8 where you say "we tend to perform well coming

9 out of these periods where we take a loss." So

10 is that sort of Mr. Leeney's verbiage?

11 A Yeah. I think what he's saying is

12 is that you're getting lots of volatility at

13 the end of the option period, which is bad for

14 the current positions, but it's good for the next

15 positions because of the fact that if there's an

16 increase in volatility, that means there's increase

17 in premium collection, which means that when you

18 do win, you can win more and when you lose, you

19 can lose less because of the fact that you're

20 collecting more premium.

21 Q All right. And did that happen for

22 customers while you were at Long Leaf Trading?

23 Did their accounts tend to perform better coming

24 out of losing trades?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 341 - 344

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 89 of 115 PageID #:2136
Page 345

1 A I think there's times, yeah.

2 Q And when were those times?

3 A I couldn't tell you specifically.

4 Q How many times did that happen,

5 that there was better performance after a period

6 of loss?

7 A I couldn't tell you specifically, but it

8 happened.

9 Q All right. Let's put this one aside,

10 if we could, please.

11 A Just to reiterate, all of these

12 communications that like when somebody does --

13 like, for example, James Leeney is designing

14 that email, that's all being routed through the

15 compliance department before it's going out to

16 a customer and being approved. So it's not --

17 nothing like goes to a customer without it being

18 approved by the compliance department.

19 Q And by that you mean Mr. Evans?

20 A Yes.

21 (Whereupon CFTC Exhibit No. 149

22 was marked for identification.)

23 Q All right. I want to hand you what

24 I've marked as CFTC Exhibit 149. And take a minute

Page 346

1 with it, please, and let me know when you've

2 looked at it.

3 MR. MAY: Hey, Ashley, we're about at

4 the 1 hour and 15-minute mark. Do we -- and

5 it's around lunchtime. Do we have an idea about

6 maybe when we're going to take a break, how long

7 we're going to break?

8 MR. BURDEN: I mean, we're doing great

9 here. If you want to take a break after this

10 exhibit, I'm happy to do that. We'll come back

11 and do --

12 MR. MAY: Okay. I think maybe

13 when we're off the record, maybe we could

14 go through the exhibits that maybe I plan on

15 using this afternoon and narrow them down.

16 MR. BURDEN: Okay.

17 MR. MAY: But we don't have to do that

18 on the record.

19 MR. BURDEN: All right. Well, I'll

20 tell you what. Do you want to do a break

21 after this exhibit?

22 MR. MAY: I think it's, yeah, probably

23 time. I probably want to check my emails.

24 MR. BURDEN: Great, okay. So let me

Page 347

1 know --

2 MR. MAY: Check in with the office.

3 MR. BURDEN: -- when you guys are ready

4 to talk about this one, please.

5 MR. MAY: This is Exhibit 149?

6 MR. BURDEN: Correct.

7 MR. MAY: Are you ready, Jeremy?

8 THE WITNESS: Yes.

9 BY MR. BURDEN:

10 Q All right. Mr. Ruth, do you recognize

11 C F T C Exhibit 149?

12 A Yes.

13 Q What is it, please.

14 A It's an email --

15 Q All right.

16 A -- chain.

17 Q And who's Chris Zolton?

18 A He was a customer of mine.

19 Q All right. So Exhibit 149 r e f l e c t s

20 Mr. Zolton writing to you and he says, "Hi, Jeremy.

21 What kind of return are we looking for? Was it

22 12 percent annually or monthly? Chris." And you

23 see the email at the top which says, "You will get

24 to design that. Normally with a 10K account my

Page 348

1 clients target $500 to $1,000 per month. Obviously

2 there are going to be months where we don't win,

3 but getting an average of win in that range is

4 a realistic target." So did you write that top

5 bit?

6 A It appears so.

7 Q All right. So how many of your

8 clients at Long Leaf Trading had an average win

9 rate of 12 percent?

10 A Well, if you read what I'm --

11 MR. MAY: I'm sorry. Did you --

12 was the question an average win rate of

13 12 percent?

14 MR. BURDEN: Sure.

15 A I'm not -- I don't know. I don't --

16 I mean, you're inferring that by my statement

17 I'm saying that I represented that to him, which

18 I didn't.

19 Q Okay. Well, you say here, "Normally

20 with a 10K account my clients target $500 to $1,000

21 a month. Obviously there are going to be months

22 where we don't win, but getting an average of win

23 in that range is a realistic target."

24 So what customers did you have

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 345 - 348

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 90 of 115 PageID #:2137
Page 349

1 that had an average win of let's say 500 to $1,000

2 per month?

3 A Again, I'm not saying that.

4 Q Okay. So what are you saying here?

5 Help me out with this, please.

6 MR. MAY: Well, okay. Is the question

7 what's written on Exhibit 149 or is the question

8 what he recalls?

9 MR. BURDEN: It's not either one of those

10 things.

11 Q Mr. Ruth, set me straight. What are you

12 talking about in this email?

13 MR. MAY: Do we -- I'm sorry. That's

14 another question. Is the prior question

15 stricken because now I think there's multiple

16 questions floating --

17 MR. BURDEN: Are you going to be

18 really formal about investigative testimony?

19 MR. MAY: No. I just want to -- I just

20 want to make sure that --

21 MR. BURDEN: What are you doing here?

22 Are you objecting? Are you just talking?

23 MR. MAY: Well, okay. No, I'm not

24 objecting. I'm observing that it might be --

Page 350

1 his response might be difficult later when

2 we're looking at the transcript to see which

3 response he's responding to if there are

4 multiple questions pending.

5 MR. BURDEN: Yeah, let's assume

6 there's one pending at a time and it's the

7 last question I asked. So --

8 MR. MAY: I'm okay with that.

9 MR. BURDEN: -- to accommodate you,

10 Mr. May, I'll make it very clear that previous

11 questions are stricken.

12 MR. MAY: Thank you.

13 BY MR. BURDEN:

14 Q And, Mr. Ruth, I would like you to

15 tell me what you're communicating to Mr. Zolton

16 in this email.

17 A I am telling him that based off

18 of the premium collection of my clients who have

19 $10,000 accounts, that it is possible for a win to

20 be in the range of 500 to $1,000 when that does --

21 when there is a win because of the fact of the

22 premium collection.

23 Q All right. And so for how many of your

24 clients did this happen for?

Page 351

1 A That's not what I'm saying.

2 MR. MAY: Okay. Do you mind if

3 I actually state that you've kind of been

4 asking him that since the last time, and this

5 time --

6 MR. BURDEN: So is this an objection?

7 MR. MAY: It is not.

8 MR. BURDEN: What do you think is going

9 to happen with it then?

10 MR. MAY: Well, okay. My point is

11 is that he's answered the question each and

12 every time.

13 MR. BURDEN: Have you seen this exhibit

14 before?

15 MR. MAY: This exhibit?

16 MR. BURDEN: Yes.

17 MR. MAY: Okay. But you're asking him

18 how many of his clients, and every time he's

19 asked -- you've asked him that question he said

20 he can't recall and he gives you the reasons

21 why he can't recall.

22 MR. BURDEN: Yeah, I don't think

23 that was his testimony. I think we're still

24 working through this.

Page 352

1 MR. MAY: I think you're ignoring all

2 the other exhibits then.

3 MR. BURDEN: Have you seen this exhibit

4 before?

5 MR. MAY: No.

6 MR. BURDEN: Was this used previously?

7 MR. MAY: No, I don't think it was.

8 MR. BURDEN: No, it wasn't. That's right.

9 MR. MAY: Right.

10 MR. BURDEN: So we're going to go

11 through this one just like the rest of them,

12 and there's more.

13 MR. MAY: Okay. I'm sure there are

14 but, I mean -- okay. I just think that,

15 again, I think --

16 MR. BURDEN: I know what you think.

17 MR. MAY: -- his testimony's not going

18 to change no matter how many exhibits you

19 show him because he's given you reasons why

20 he can't recall. And you're upsetting his dog.

21 MR. BURDEN: Yeah. I want the record

22 to reflect that Mr. Ruth brought his dog.

23 Q Is that correct, Mr. Ruth?

24 A Yes.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 349 - 352

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 91 of 115 PageID #:2138
Page 353

1 MS. STREIT: I'm surprised he was let

2 into the building.

3 MR. MAY: Yeah. Maybe now that that's

4 reflected, that Mr. Ruth's dog is in an airline

5 container where the dog is not able to leave

6 the bag I guess is the best way to describe

7 it -- I've never had this happen before.

8 MR. BURDEN: The CFTC has no objection

9 to the dog and doesn't care at all.

10 Q All right. So let's return, if we

11 could, please, to Exhibit 149. How many of your

12 clients at Long Leaf Trading enjoyed wins of 500

13 to $1,000 per month?

14 A I would -- every single one of them.

15 Q All right. And so did they have an

16 average win rate of 500 to $1,000 a month over the

17 course of the life of their accounts?

18 A No, but that's not what's being

19 represented in this statement.

20 Q So what are you trying to tell Mr. Zolton?

21 A That based off of the premium

22 collection that you can get with a $10,000

23 account and the four positions, that I can say

24 it's realistic for -- in the event that you were

Page 354

1 to have a winning month, that it could be within

2 that 500 to $1,000 range.

3 Q All right. So I want to draw attention

4 to your use of the word average, and that's sort

5 of the source of my line of questioning here. You

6 write, "Obviously there are going to be months where

7 you don't win, but getting an average of win in that

8 range is a realistic target."

9 So when you talk about an average

10 of win in that range, do you mean an average of win

11 in the 500 to $1,000 a month range?

12 A Can you repeat the question?

13 Q Sure. So when you talk about getting

14 an average of win in that range, the range you're

15 referring to is 500 to $1,000 per month, is that

16 correct?

17 A Yeah, but you're taking out the word "is a

18 realistic target."

19 Q Yeah, right.

20 A That's an important part of the whole

21 statement.

22 Q No, yeah, we got the statement. So

23 my question is how many of your customers had an

24 average of 500 to $1,000 profit a month in their

Page 355

1 accounts?

2 A I don't -- that's not -- I'm saying

3 that in the event let's say you have a winning

4 month, it is realistic for that winning month to

5 be in the range of 500 to $1,000.

6 Q Got it. So let's put that aside

7 for a second and let me just ask you separate

8 and apart from Exhibit 149 - -

9 A Okay.

10 Q -- how many of your clients had

11 an average profit of 500 to $1,000 per month in

12 their account over the life of the account?

13 A That's -- I don't -- again, this

14 is going back to my previous testimony is is that

15 we only look at one month at a time.

16 Q But it says here -- and I've got

17 to push back on this a little bit. You're talking

18 about an average and that's why I'm focused on

19 averages. So how many of your clients had average

20 profits of 500 to $1,000 per month in their account

21 over the life of the account?

22 A Well, that's not the intention of

23 the statement. The intention of the statement

24 is to say that in the event that you have a winning

Page 356

1 month, based off the premium collection that you

2 could collect on a $10,000 account, it is realistic

3 for it to be in the target range of 500 to $1,000.

4 Q But what customers did you have that

5 enjoyed that average?

6 A I have -- I had customers that had

7 winning months where the winning month profits

8 were in the range of 500 to $1,000.

9 Q And did those customers have average

10 profits on a monthly basis over the life of their

11 account --

12 A I don't know.

13 Q You've got to let me finish.

14 MR. MAY: You can't answer his question

15 until he's done asking it.

16 THE WITNESS: All right.

17 BY MR. BURDEN:

18 Q -- of 500 to $1,000 a month?

19 A I don't know. I don't recall.

20 MR. BURDEN: All right. Do you guys want

21 to do your lunch?

22 MR. MAY: That works for me.

23 MR. BURDEN: Great, okay. Let's go off

24 the record, please.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 353 - 356

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 92 of 115 PageID #:2139
Page 357

1 (Whereupon a lunch recess was taken

2 from 12:25 p.m., to 2:05 p.m., after

3 which the following proceedings were

4 had:)

5 A F T E R N O O N S E S S I O N

6 JEREMY RUTH,

7 called as a witness herein, having been previously

8 sworn and examined, testified further as follows:

9 FURTHER EXAMINATION (Cont'd.)

10 BY MR. BURDEN:

11 Q All right. So, Mr. Ruth, I'm going

12 to play you an audio file produced by Long Leaf

13 Trading.

14 MR. BURDEN: I'm going to mark

15 it as CFTC Exhibit 150. The file name is

16 05-03-2017_JAYCALDWELL --

17 MR. MAY: Could you do the dates again,

18 Ashley?

19 MR. BURDEN: Sure. 05-03-2017_JAYCALDWELL

20 _3527464855.

21 (Whereupon CFTC Exhibit No. 150

22 was marked for identification.)

23 Q So, Mr. Ruth, does the name Jay Caldwell

24 ring any bells for you?

Page 358

1 A No.

2 MR. BURDEN: All right. So I want

3 to start this at 1 hour, 18 minutes and

4 40 seconds. Let's see how --

5 MR. MAY: Could you tell me how long

6 the whole thing is?

7 MR. BURDEN: 113 minutes and 8 seconds.

8 MR. MAY: 113 minutes and 8 seconds.

9 MR. BURDEN: Or, you know what, I

10 take that back. I'm reading the wrong field.

11 It's 1 hour, 53 minutes and 8 seconds.

12 THE WITNESS: And we're starting where?

13 MR. BURDEN: At 1:18:40, if I can get

14 it to work. So we're starting at 1:18:19,

15 which is close enough.

16 (Whereupon the audio was played.)

17 MR. BURDEN: So I want to stop it there

18 at 12:04.

19 MR. MAY: 12:04?

20 MR. BURDEN: Yeah.

21 Q So, Mr. Ruth, is that your voice on the

22 call?

23 A Yes.

24 Q All right. So did you have any

Page 359

1 customers at Long Leaf who made $45,000 on a

2 $150,000 account?

3 A Are you asking me this in relation to

4 the video -- the audio you just played?

5 Q Yes.

6 A I mean, that's not what the audio is

7 talking about.

8 Q All right. So what's that audio talking

9 about?

10 A I think it's talking about a commission

11 discount and how that affects the bottom line in the

12 event that there's a return.

13 Q All right. Well, did you have any

14 customers that achieved the return that you're

15 describing to Mr. Caldwell on the call?

16 A Well, Mr. Caldwell is completely

17 different from all my other clients because

18 it's a significant amount more money than any

19 other client that I think I've had.

20 Q All right. So did you have any clients

21 who achieved a $30,000 return over the course of

22 a year?

23 MR. MAY: Course of a year?

24 MR. BURDEN: Yeah.

Page 360

1 A I don't know. But, again, this

2 guy's got four times the amount of money that

3 like my average client had. So I don't think

4 that's -- I don't -- yeah, I mean, I don't recall

5 anybody having a $30,000 return.

6 Q Did anybody that was your client have

7 more than a $30,000 return?

8 A I don't recall.

9 Q Did anybody who was your client have

10 a 20 percent return or anything close to that over

11 the life of their account?

12 A I don't do anything over the life of

13 the account. We live -- as I've testified before,

14 we live on a month-to-month basis when we talk about

15 results with our clients.

16 Q All right. And do you say that to

17 the client? You know, and I'm talking generally

18 about calls, you know. I hear you kind of telling

19 me that you look at things on a month-to-month

20 basis, is that right?

21 A Correct.

22 Q So when you're talking to clients,

23 am I going to hear calls where you tell them,

24 listen, this only relates to one month at a time?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 357 - 360

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 93 of 115 PageID #:2140
Page 361

1 A Yeah, I only talk about the results

2 from -- I mean, if there's multiple -- like let's

3 say there's multiple bad months in a row or multiple

4 good months in a row. Then maybe I like reference,

5 you know, well, it's two months in a row that we've

6 done well or that it's two months in a row that,

7 you know, we've done poorly. But I don't talk

8 about necessarily the overall performance of the

9 account over the time period because what's relevant

10 is reporting the results of what was done in that

11 month.

12 Q So when you're talking to this

13 prospective client, Mr. Caldwell, we just heard

14 this small snippet of the call where you talk about

15 how a customer could achieve almost a 20 percent

16 return with a $150,000 account and with the

17 commission --

18 A Well, that's almost a two-hour phone

19 call, and I think you cut off the part before it

20 where we're not talking about giving him a return.

21 We're talking about in a hypothetical situation if

22 he were to achieve a 12 percent return but then he

23 got a commission discount because of the amount

24 of money that he put into the account, what effect

Page 362

1 that would have on the bottom line.

2 Q Yeah. I know the part of the call

3 you're talking about, but what I'm asking is sort

4 of more general, right? Like if you're telling

5 customers, as you were telling Mr. Caldwell --

6 A Sorry, go ahead.

7 Q -- about returns, do you make it

8 clear that you're only saying that these returns

9 are achieved sort of in one month rather than

10 overall?

11 A I'm not talking to him about returns,

12 though. I'm talking to him about commission

13 discounts based off the amount of money that he

14 puts into the account on his initial deposit.

15 MR. BURDEN: All right. I'm going to

16 move on to the next part of this call I want

17 to talk about at 1:36:35. All right. We're

18 going to start at 1:36:33.

19 (Whereupon the audio was played.)

20 MR. BURDEN: All right. So let me stop

21 it at 1:36:57.

22 Q So why did you ask Mr. Caldwell

23 if any of his family members were part of the NFA

24 or SEC?

Page 363

1 A As part of the application.

2 Q What application?

3 A The Gain Capital application.

4 Q Is that -- that's funny. I didn't

5 see that. Where is that on the application?

6 A I don't know. In the application.

7 Q Okay. Well, you can imagine --

8 MR. MAY: You don't have a page number?

9 THE WITNESS: No.

10 BY MR. BURDEN:

11 Q Yeah. Well, you could imagine how

12 I'd be really interested in that. So what part

13 of the application is it in? Tell me what you can

14 remember, if you would, please.

15 A If you go online to a Gain Capital

16 application, they ask that question probably to

17 this day.

18 Q Okay. So did you ask other customers

19 the same question?

20 A Yeah. Every customer fills out the

21 same application, the same -- that application while

22 I worked there was -- evolved over time.

23 Q Yeah.

24 A Was provided by Gain Capital.

Page 364

1 Q Well, I'm asking a simpler question,

2 which is just did you ask other customers if they

3 had family members who were the SEC or NFA?

4 A If I was assisting them in filling out

5 the application, then yes.

6 Q Okay. Did anybody ever say, yes,

7 I do have a family member that's at the SEC or the

8 NFA?

9 A No, not to my knowledge.

10 Q What would you have done if they had

11 said yes?

12 MR. MAY: Is that a hypothetical?

13 MR. BURDEN: Yeah.

14 A I would have hypothetically selected

15 yes on the application or advised them to put --

16 disclose that on the application.

17 Q Got it.

18 (Whereupon CFTC Exhibit No. 151

19 was marked for identification.)

20 Q Mr. Ruth, I want to hand you what I've

21 marked as CFTC Exhibit 151. And take a look at it

22 for me, if you would, please.

23 A (Witness complies).

24 MR. MAY: Are you ready, Jeremy?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 361 - 364

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 94 of 115 PageID #:2141
Page 365

1 THE WITNESS: Yes.

2 BY MR. BURDEN:

3 Q Do you recognize CFTC Exhibit 151?

4 A No.

5 Q So CFTC Exhibit 151 purports to be an

6 email from Luis Molina to you and it says Questions,

7 and the first question is what I'm interested in.

8 Mr. Molina appears to write, "Can we have access

9 to the Jordan Belfort videos for our own training?"

10 What are these videos that he's referring to?

11 A The Jordan Belfort -- there's like

12 a sales system called the Straight Line Persuasion,

13 and there's videos that go along with that and

14 that's what he's referring to.

15 Q All right. So did Long Leaf have them,

16 these videos?

17 A No, they're on YouTube.

18 Q So why is he saying can we have access

19 to them?

20 A Again, like going back to like that

21 Monday -- like the morning meeting thing, these

22 are like questions that -- they're supposed to

23 like -- they were supposed to submit questions

24 to me every morning for me to then present them

Page 366

1 to Tim for Tim to answer them during the morning

2 meeting.

3 Q Did Tim answer this question?

4 A I would -- I don't recall, but I would

5 assume so.

6 Q Did you watch any of these Straight Line

7 Persuasion videos?

8 A Yes.

9 Q Where did you watch them?

10 A YouTube.

11 Q But like at work or at home?

12 A Both.

13 Q And why did you watch them?

14 A I don't know. It's a motivational

15 video for development of sales skills. I don't

16 know.

17 Q Were these recommended to you by somebody?

18 A Tim Evans, yeah.

19 Q All right. Who's Jordan Belfort?

20 A He's the Wolf of Wall Street.

21 Q That's right.

22 A Have you ever seen the videos, though?

23 Q After reading that email, I watched all

24 of them.

Page 367

1 A Yeah, all right.

2 MR. MAY: Wait. You're not supposed to

3 be testifying.

4 MR. BURDEN: I answer the questions

5 that I want to or that I think are funny.

6 That's my policy.

7 A I mean, I just think --

8 MR. MAY: You answered his question.

9 You don't really need to elaborate.

10 THE WITNESS: I just want to --

11 MR. MAY: Do you want to elaborate?

12 THE WITNESS: I do. I want to say

13 something.

14 BY MR. BURDEN:

15 Q Okay. Go ahead.

16 MR. MAY: Please don't.

17 A I get that like having you associated

18 with Jordan Belfort, if you knew his story, doesn't

19 sound good from a regulation standpoint. But since

20 you have watched the movies, he does talk about like

21 the ethical stuff of it every five seconds, that he

22 was basically a POS and that you shouldn't be a POS

23 in the future. I just want to point that out.

24 MR. MAY: I'm sorry. Just so we're

Page 368

1 clear for the record, POS?

2 THE WITNESS: Piece of shit.

3 (Whereupon CFTC Exhibit No. 152

4 was marked for identification.)

5 BY MR. BURDEN:

6 Q All right. I want to hand you what I've

7 marked as CFTC Exhibit 152.

8 MR. MAY: Ready, Jeremy?

9 THE WITNESS: Yes.

10 BY MR. BURDEN:

11 Q Mr. Ruth, do you recognize CFTC

12 Exhibit 152?

13 A No.

14 Q All right. So it looks like an email

15 sent from you to somebody at this string of numbers

16 and letters sent April 3, 2017 and it looks like

17 you're corresponding with this Alexander Krone.

18 Who's Alexander Krone?

19 A It seems like -- appears to be some

20 guy who was, I don't know, inquiring to work at

21 Long Leaf.

22 Q I mean, do you remember him? We can both

23 read the email.

24 A I mean, after reading the email, I mean,

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 365 - 368

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 95 of 115 PageID #:2142
Page 369

1 I kind of know who he is, yeah.

2 Q Okay. So do you remember corresponding

3 with him?

4 A Yes.

5 Q All right. So my question here

6 is you write to him, "I'll make 370K this year

7 if I do not open up another account." Is that true?

8 A Well, I got fired three months later

9 so --

10 Q All right.

11 A -- no.

12 Q You know, I guess what I ought to ask

13 is how much money did you make at Long Leaf Trading?

14 And if you have to break it down by year, if that's

15 easier, then go right ahead.

16 A I don't know. I have no clue.

17 Q Was it more than $100,000 a year?

18 A I don't know.

19 Q More than $50,000 a year?

20 A I would assume so. Hopefully, yeah.

21 Here's one thing you've got to understand. When

22 it comes to like my compensation with Long Leaf --

23 Q Yeah.

24 A -- I was never properly compensated.

Page 370

1 And, yeah, so it's what do I think I should have

2 been paid and --

3 Q Well, my question is what were you paid,

4 right?

5 A Like physically paid? I mean, I don't

6 remember off the top of my head.

7 Q All right. Can you give us a ballpark,

8 right, because all we have to go on --

9 A I think in 2017, which -- and I

10 understand I only worked there for half a year --

11 I think it was somewhere around 200 grand was --

12 which I was actually physically paid.

13 Q All right. So 2016, what did Long Leaf

14 pay you in 2016?

15 A I don't know.

16 Q Was it more or less than 200K?

17 A I don't know. I couldn't tell you off

18 the top of my head.

19 Q What about 2015?

20 A Maybe like $10.

21 Q Why only $10?

22 A Because I was -- I don't know. I was new

23 in the industry so I didn't make anything.

24 Q When did you start in 2015?

Page 371

1 A Technically I got my license like

2 April 24th I think it was.

3 Q Well, that's a long -- I mean, surely

4 they didn't pay you $10 for --

5 A Yeah, it was --

6 MR. MAY: Are you being facetious when

7 you --

8 THE WITNESS: Yeah.

9 MR. MAY: -- testified that $10 --

10 THE WITNESS: I don't know. I don't

11 know.

12 BY MR. BURDEN:

13 Q Definitely do not be facetious, please.

14 A Okay.

15 Q Was it more than $100,000?

16 A No.

17 MR. MAY: And, Ashley, does your question

18 relate to 2015?

19 MR. BURDEN: Yes.

20 MR. MAY: Okay.

21 BY MR. BURDEN:

22 Q So the question again, in 2015 did you

23 make more than $100,000?

24 A I don't recall.

Page 372

1 (Whereupon CFTC Exhibit No. 153

2 was marked for identification.)

3 Q All right. So I want to hand you what

4 I've marked as CFTC Exhibit 153. This is a group

5 exhibit, and the group exhibit is an email that

6 purports to have been sent by you. And the email's

7 got a link in it, and I'm handing you what's in that

8 link and we've printed it.

9 MR. MAY: This is now 153?

10 MR. BURDEN: Yeah.

11 A All right.

12 MR. MAY: Hold on. I'm not ready.

13 THE WITNESS: I'm curious where this

14 is going.

15 MR. MAY: Are you ready, Jeremy?

16 THE WITNESS: Yes.

17 BY MR. BURDEN:

18 Q Mr. Ruth, do you recognize CFTC

19 Exhibit 153?

20 A Yes.

21 Q What is it, please.

22 A It's an email that I sent to Tim Evans

23 with a link.

24 Q And the subject line is Case I was talking

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 369 - 372

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 96 of 115 PageID #:2143
Page 373

1 about. Do you see that?

2 A Um-hmm.

3 Q Yes?

4 A Yes.

5 Q Thanks. So what's the case you were

6 talking about and why were you talking about it?

7 A James Cordier is an option sellers

8 principal. And when I would solicit people a lot

9 and talk about Time Means Money, sometimes I'd run

10 into people who either were option sellers clients

11 or had gone through their solicitation process,

12 and they would bring it up. So I studied, you

13 know, their process and what they did so I could

14 talk educatedly about like what the difference is

15 between what we did and what they did. And what

16 was the question?

17 MR. MAY: There were two.

18 BY MR. BURDEN:

19 Q Yeah. So it was what was the case?

20 MR. MAY: I think you've dealt with

21 the first one.

22 BY MR. BURDEN:

23 Q Yeah, and supply that. Then I asked,

24 you know, why did you send this to --

Page 374

1 A Oh, Tim?

2 Q Yeah, to Mr. Evans.

3 A Yeah. I think it was more of like --

4 if you read in here, they like showed examples

5 of emails that James would send out to his

6 clients I was interested in because I think at

7 that time I was talking about Tim to write like

8 emails to the clients on a monthly basis as opposed

9 to me doing it when I don't represent his trades,

10 you know, if that makes sense. So I think it was

11 like showing him like, hey, this has been done in

12 the past, this is how it's done, and this is how

13 the CFTC feels about it.

14 Q All right. Did you have any followup

15 discussions with Mr. Evans after you sent the email?

16 A I don't know exactly.

17 Q Well, do you remember if you had any

18 or not?

19 A No. I mean, that was -- from the

20 period of around this time, like me and him were

21 in like a -- I don't know if you want to call it

22 a feud.

23 Q Well, I want to get into that in a minute.

24 But right now --

Page 375

1 A Yeah.

2 Q -- if we could, let's just please

3 focus on 153. So it seems like you did some real

4 diligence here. I didn't know that. I didn't

5 know that this James Scott Cordier was part of an

6 option selling group. But I see that you sent this

7 link to your boss and that he got in trouble for

8 unauthorized trading, which is what's reflected in

9 this order. And I want to know did you have any

10 discussions with Mr. Evans about it?

11 A Yeah. I mean, like I had talked

12 to him about it after I read it, and then I sent

13 it to him so that he could, I guess, read it. I

14 don't know if he read it or I don't recall what

15 happened after that.

16 Q Got it.

17 A Yeah.

18 Q So when you were talking to Mr. Evans

19 about it, what did you say, please.

20 A Just like, hey, this -- I read this.

21 This is what happened, you know. Now, you know,

22 I get why we do this. Like stuff like that. I'm

23 like --

24 Q Well, what was the stuff that you got --

Page 376

1 A I don't remember specifically, but

2 I would have to read the whole entire thing again

3 to -- but I don't know. Like --

4 MR. MAY: When you say the whole

5 entire thing, could you elaborate on that?

6 A The whole entire -- I don't know.

7 BY MR. BURDEN:

8 Q Decision?

9 A Yeah, I guess.

10 MR. MAY: Starting at page 1 and ending

11 at page 33?

12 THE WITNESS: Yeah, yes.

13 A You know, and I would ask him

14 questions too. Like you've got like the whole

15 PFG, MF Global, all that stuff happened before I

16 was in the industry, but like people talked to me

17 about it. And if I don't know about it, then why

18 would they want to invest their money with that

19 person. So I tried to learn stuff and be an expert

20 in the industry. So, yeah, I think it was more of

21 a development of myself.

22 BY MR. BURDEN:

23 Q So did Mr. Evans do anything different

24 or make any changes in response to your email?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 373 - 376

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 97 of 115 PageID #:2144
Page 377

1 A I couldn't tell you.

2 Q Were you trying to suggest by

3 this email that Long Leaf Trading shouldn't make

4 certain solicitations? Was that the point of this?

5 A No.

6 Q Was the point of the email to

7 suggest that Long Leaf Trading might be engaged

8 in unauthorized trading and so not to do that?

9 A No, no, not that I -- no.

10 Q All right. Let's put this one aside then.

11 A (Witness complies).

12 Q So I don't think I asked you this last

13 time, other than maybe very briefly. I haven't --

14 I just haven't reviewed the transcript yet. Why

15 were you let go from Long Leaf Trading?

16 A I mean, it's kind of like a buildup.

17 But the specific -- on the specific day that I was

18 let go was the day where I think like a majority

19 of the accounts were down like eighty some percent

20 and we had to, you know, pitch the trades that

21 Tim had designed. And I want to say, if I recall

22 correctly -- I could be wrong -- I had like

23 67 clients at the time and those -- this

24 conversation was longer than normal. Like most

Page 378

1 of them are, you know, maybe like two, three minutes

2 every month. Well, this was like a significant

3 point in these people's accounts where these were

4 30-minute, hour-long conversations.

5 Q So when you're talking about these

6 conversations, you're talking about conversations

7 with clients?

8 A Yes. And it's where I'm giving them

9 results, telling them, hey, I guess, you know,

10 we're trying to get this turned around. Here's what

11 we're doing, da, da, da, da, da, da, give them the

12 whole spiel and trying to obtain their permission to

13 do the next trades. And it was a very difficult --

14 very difficult conversations to have and very

15 lengthy. And I had 67 clients and he didn't like

16 the speed in which I was moving and I didn't like

17 the trading results. So he, you know, told me

18 to leave the office and I left and then he wanted

19 like -- he wanted stuff from me. Basically I got

20 the impression that he didn't want to pay me for --

21 he didn't want to pay me the commissions that

22 I would have generated from there. So he figured

23 out that it would be easier to fire Jeremy and

24 then he got to keep all the commissions. That's

Page 379

1 all I got.

2 Q So when you said that Mr. Evans didn't

3 like the speed that you were going, what did he say

4 to you?

5 A Like hurry the fuck up.

6 Q Got it. So you were going too slow

7 for him?

8 A I wasn't, but for him because he's

9 trying to execute and I'm trying to make sure that

10 I have permission and that these people understand

11 what's going on.

12 Q So your testimony I think just now

13 is that you were calling up customers and you were

14 giving them the results. And that was bad news at

15 this point, is that right?

16 A It was a bad -- it was a terrible month,

17 yeah.

18 Q Got it.

19 A And so, yeah, it was a terrible month

20 on top of I think maybe a terrible month before

21 then. So it was pretty bad, yeah.

22 Q Did you usually provide clients with

23 trading results, i.e., call them and tell them how

24 their trades had done?

Page 380

1 A Yeah.

2 Q And was that sort of every time the

3 trades were closed?

4 A Yeah, pretty much, yeah. I mean,

5 every client liked to be talked to differently.

6 Q Got it. And how did you know what those

7 results were?

8 A From Tim Evans.

9 Q And you also knew them because you got

10 the Gain statements every day, right?

11 A Well, yeah, but --

12 Q And would you give them the results

13 sort of for the life of their account or just that

14 month?

15 A Just that month I think would be

16 more specific. Sometimes I might be -- you know,

17 sometimes somebody might like -- it wasn't the same

18 thing for every single person. So if somebody

19 said -- you know, there could be a time where like

20 maybe it was like the second month they're in.

21 Well, are we up overall since we started? And

22 then I would say either yes or no, which probably

23 at that time would be no. But it was mostly on

24 a monthly basis.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 377 - 380

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 98 of 115 PageID #:2145
Page 381

1 MR. PATRICK: Was it Tim Evans that

2 told you -- I think you testified earlier

3 that the majority of the accounts were down

4 more than 80 percent. Was that something that

5 Tim told you?

6 THE WITNESS: Yeah, yeah. Like that

7 morning he pulled us into like a conference

8 room and was like, all right, you guys are going

9 to have a really shitty day, you know. This

10 is where your accounts are at. But, you know,

11 I need you to soldier up and make these phone

12 calls and da, da, da, da, da, like trying to

13 huddle around. Like we need to make sure

14 that -- you know, we're going to lose people,

15 people are going to be upset but, you know,

16 you need to like make it the best as possible.

17 And it just so happened it took me a while

18 to do that.

19 MR. BURDEN: All right. You know,

20 that's all I've got. If we could go off the

21 record for a couple minutes, I'll confer with

22 my colleagues. And if you guys want to get

23 your exhibits together, I know, Mr. May, you

24 wanted to ask some questions.

Page 382

1 MR. MAY: I did, yeah.

2 MR. BURDEN: How much time should we take

3 a little break here for?

4 MR. MAY: Like 15 minutes?

5 MR. BURDEN: Okay, that sounds good.

6 Off the record, please.

7 (Whereupon a recess was taken from

8 2:45 p.m., to 3:20 p.m., after which

9 the following proceedings were had:)

10 MR. BURDEN: Let's go back on the record,

11 please.

12 Q All right. So, Mr. Ruth, when did you

13 leave Postrock?

14 A May 2nd.

15 Q All right. And what were the circumstances

16 for your departure?

17 A I was starting my own occupation.

18 Q So did you quit or were you fired?

19 A It's interesting because I thought

20 that I quit, and I think Postrock's attorney might

21 have represented to my previous counsel that I was

22 fired. So I don't know the answer.

23 Q Who was your previous counsel, please.

24 A Do you mind if I --

Page 383

1 Q Yeah, go right ahead.

2 A Jake Cahn, C-a-h-n.

3 Q All right. And do you know the name

4 of Postrock's counsel that you're referring to?

5 A Yeah, I have that one in here.

6 Matthew Kluchenek.

7 Q All right. And I should know this,

8 but I can't remember. Did you go over to Postrock

9 with Mr. Leeney?

10 A We went over separately. But, yeah, we

11 both were at --

12 Q So who from Long Leaf was at Postrock?

13 A Me, James Leeney, Luis Molina was

14 at one point, Vince Prieto was at one point,

15 what's his name, Brendan Sears was at one point,

16 and there was one other. I forgot his name.

17 Q All right. So when you were

18 at Postrock, were you sort of making trade

19 recommendations to customers in the same kind of

20 way that Long Leaf was?

21 A How was Long Leaf making trade

22 recommendations?

23 Q Well, you know, we've seen Long Leaf

24 make these recommendations through the Time Means

Page 384

1 Money program, right?

2 A Yeah.

3 Q All right. And they're recommending

4 trades to customers and customers can participate

5 in those trades or not, right?

6 A Correct.

7 Q So -- and I think we established

8 too that these trades recommended by Long Leaf

9 were spread trades typically, is that also right?

10 A Yes.

11 Q All right. And these customers

12 really all get the same recommendations, though

13 they may participate in them differently, is that

14 fair to say?

15 A No.

16 Q What's wrong about that?

17 A The word same recommendation. The word

18 "same" is what's wrong with that.

19 Q Okay. So my understanding, and

20 I thought we've been looking at these emails

21 together, is that the same sort of spread trade

22 recommendation goes out to everybody and the thing

23 that's different is the number of contracts that's

24 recommended.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 381 - 384

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 99 of 115 PageID #:2146
Page 385

1 A No.

2 Q Okay. So what else is different?

3 A The fill prices, which means that

4 it's completely different, and sometimes even the

5 strike prices.

6 Q You know, my understanding was that

7 the Long Leaf Trading recommendations had the same

8 strike and fill prices for all customers. Is that

9 not right?

10 A No.

11 Q So if I compare all of the Long Leaf

12 trading recommendations, I'll see different strike

13 prices recommended to customers?

14 A At times, yes.

15 Q All right. Well --

16 A That's why there's no track record,

17 is what we're trying --

18 Q Well, I'm not sure if I agree with

19 that characterization. That's new to me and I think

20 contradicts previous testimony, but we're going to

21 look into it. You know, what I want to get at here

22 is what --

23 A Like there's -- yeah. So there's

24 like a quote/unquote block order. I don't know

Page 386

1 if block's the right term, but a mass order where

2 generally I think those are like APS'd. But then

3 there's trades that are done that are outside of

4 that block order, that those people are still part

5 of the program, and so they're getting different

6 fill prices. And in some cases, because those

7 fill prices aren't available, it makes sense for the

8 program or that client, they're getting different

9 strikes prices.

10 Q I see. All right.

11 A Yeah, so you're right. A majority

12 of them try to like -- try to be done in like

13 a mass, you know, quantity. But, I mean, that's

14 not the case. I don't think there's a single month

15 where every single person was traded the same way.

16 Q So what I want to try to figure out --

17 and that's helpful -- is did Postrock do this same

18 type of thing?

19 A Yeah. I mean, we -- like James Leeney

20 and I did something similar to the Time Means Money

21 program, yeah, but it's not the exact same thing.

22 Q So when you say that you and Mr. Leeney

23 did something that was similar to the Time Means

24 Money program at Postrock, who came up with the

Page 387

1 trade recommendations there?

2 A I mean, they were constantly evolving.

3 We had -- I mean, James Leeney hired a couple

4 different like chief market strategists, a lot

5 of people involved and constantly trying to, you

6 know, figure out a way to make it work.

7 Q Got it. So it sounds like at Postrock

8 those recommendations didn't come from somebody

9 way up high at Postrock. They were generated

10 by Mr. Leeney or somebody hired by Mr. Leeney,

11 is that right?

12 A Yeah. I mean, yeah -- no, nobody

13 at like Postrock -- yes, not like there's one

14 principal at Postrock. No, he wasn't -- I mean,

15 he might have like given his two cents on a trade

16 or something of that nature but not -- like he

17 wasn't the designer of a trade.

18 Q Did you come up with any trades

19 at Postrock that were recommended to customers?

20 A Yeah, probably.

21 Q Did you when you were at Postrock

22 use -- did you use any of the old sales materials

23 from Long Leaf Trading?

24 A I don't know how you could because

Page 388

1 I don't work for Long Leaf, though.

2 Q Well, you got scripts, right? Like

3 did you bring them over or adapt them or anything

4 like that?

5 A I mean, the scripts at Long Leaf

6 say Long Leaf on them. So if you call and say

7 I'm with Long Leaf but you're really with Postrock,

8 that wouldn't really work.

9 Q Right. But did you use the same script

10 or a similar script but change it to Postrock?

11 A I mean, there's similarities but

12 I wouldn't say that -- I guess you could say like

13 the Postrock pitch was a derivative of the Long Leaf

14 one, but it's not -- there's a lot of enhancements

15 and differences as well.

16 Q Got it. And who developed that pitch?

17 Who wrote that pitch?

18 A Me, James Leeney, compliance, Ryan

19 Griffith. We got feedback from Turnkey Partners

20 I think it's called. Bunch of people involved.

21 Q All right. Do you have any of those

22 scripts or sales materials that you used while you

23 were at Postrock?

24 A I don't know. I don't know.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 385 - 388

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 100 of 115 PageID #:2147
Page 389

1 Q Okay. So I don't think those fall

2 within the ambit of the subpoena that we've served

3 upon you, so we'll be serving another one for those

4 but --

5 A I mean, I don't have access to --

6 like the same thing. I got cut off from all my

7 Postrock stuff.

8 Q No, I understand.

9 A Yeah.

10 Q But I'm admonishing you not to destroy

11 them. And I'll send you guys a subpoena and you

12 can look for them. If you've got them, we'll look

13 at them and if you don't, you don't.

14 A All right.

15 Q So did Postrock terminate you for making

16 misrepresentations to clients?

17 A No, I've never been told by Postrock that

18 I've been terminated so ...

19 Q How did you quit?

20 A Well, I'd been planning for like months

21 to go out on my own with their help, and I was going

22 to leave on May 1st. And then they got a call from

23 the NFA saying, hey, we want to interview Jeremy

24 Ruth and they came in. So I didn't move over that

Page 390

1 day, and I came in on May 2nd and -- or maybe

2 it was May 1st, I don't know, May 1st maybe and

3 the NFA interviewed me. And then the next day I got

4 to the office and I was like, all right, I'm moving

5 over to, you know, my new operation today. And they

6 said okay, and he goes let me know when you hit the

7 submit button and then I'll drop you on our end,

8 and that was it.

9 Q So did anybody say anything to you

10 about misrepresentations or misbehavior of any

11 kind?

12 A At Postrock?

13 Q Yeah.

14 A I mean, the nature of the NFA

15 coming to talk to me, they didn't -- I mean,

16 I don't know what you'd call that, but they I guess

17 made some allegations but not -- Postrock never said

18 anything.

19 Q Yeah. What I'm asking you is did

20 Postrock ever admonish you or otherwise accuse you

21 or misconduct or fraud?

22 A No, no.

23 Q So your testimony is that you learned

24 through your counsel that -- your former counsel

Page 391

1 that Postrock had been claiming that they had

2 fired you?

3 A Yeah. He had talked, yeah, to their

4 counsel. He goes -- he had asked me like, you

5 know, how did it end and I told him. He goes, all

6 right, well, their official position is is that they

7 terminated you.

8 Q That doesn't sound right, though.

9 A Why?

10 Q Well, it doesn't sound like they

11 terminated you. It sounds like your testimony is

12 that they didn't terminate you.

13 A They didn't, no, but that was what I was

14 told through --

15 Q Yeah.

16 A -- my previous counsel, yeah.

17 Q All right. Have Postrock come back to

18 you at all with demands or trying to contact you?

19 A No. I've tried to contact them, though.

20 Q What did you try to contact them about?

21 A I got screwed out of another paycheck

22 at the end.

23 Q Did they respond?

24 A No.

Page 392

1 MR. MAY: See if we can't do something

2 about that.

3 BY MR. BURDEN:

4 Q So I think you testified that you were

5 planning on leaving Postrock but that Postrock was

6 going to help you, is that right?

7 A Postrock had been. I'd been working on

8 trying to leave for months.

9 Q So what kind of help were they giving you?

10 A Oh, everything. Like contacts, like

11 advice, consulting, everything.

12 Q But why did they want you to do that?

13 Were they going to make money off it somehow?

14 A Off me leaving?

15 Q Yeah.

16 A When I originally went over there,

17 there was never the intentions of like me being

18 there forever. It was kind of like a steppingstone.

19 Q Well, like why would they want to

20 help you out with that? It seems like you were

21 a tremendously productive salesperson at Long Leaf.

22 A Because I wasn't in a position to --

23 I had learned under one person, and I knew myself --

24 like that was my pitch to them. I'm not --

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 389 - 392

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 101 of 115 PageID #:2148
Page 393

1 I mean, I'm not ready to start my own firm.

2 I want to start my own firm, but I want to learn

3 from other people as well before I do so. So, you

4 know, it just turned out to be a very good fit

5 because Ryan Griffith I think is a very good mentor.

6 And, you know, when it comes to like compliance and

7 regulations and things, I've learned a ton from him.

8 Q And he's the principal at Postrock?

9 A No, Kevin Meyer.

10 Q Who's he?

11 A He's, I don't know, Kevin Meyer's

12 right-hand man type AP slash -- I don't know.

13 Q And, sorry, is he at Postrock?

14 A Yeah.

15 Q Okay.

16 A He's also on like the, I don't know,

17 the independent introducing broker like association.

18 Like he's -- yeah. Like Friday night most people

19 go out and -- go out to dinner or go out and eat,

20 cocktails. He sits at home and reads like the CFTC

21 Exchange Act and stuff like that so ...

22 Q Another quick one, if we could, please

23 on Postrock, which is while you were at Postrock

24 how many other brokers were there?

Page 394

1 A Postrock is very like secretive

2 in telling me like about their -- they have like

3 multiple brokers all across the country I think in

4 various different locations, but I don't -- I didn't

5 really get involved. Like Postrock's primary focus

6 is commercial hedging and they don't do retail,

7 except for I think they might do like managed

8 futures through some other plan. And so I only saw

9 like the people that are in the Chicago office.

10 Q But you continued to do sort of retail

11 work for them, right?

12 A Yeah, correct.

13 Q All right. So how many other people

14 were in the Chicago office? So what I'm trying

15 to get a feel for is like what percentage this group

16 of Long Leaf guys constituted. Was it just a few

17 brokers or a lot? It sounds like you don't know

18 nationwide, but in Chicago --

19 A I don't know. Yeah, I don't know

20 how many brokers they have but it's, you know --

21 how many -- I'm sorry. You were trying to figure

22 out how many we represented?

23 Q Yeah.

24 A Well, there's --

Page 395

1 MR. MAY: So I'm guessing the question

2 is the percentage of the Chicago office of

3 Postrock, the percentage of Long Leaf -- former

4 Long Leaf traders who were at Postrock, the

5 percentage of the total of Postrock --

6 A I don't -- yeah.

7 MR. MAY: -- reps.

8 A I mean, it was either me and James Leeney

9 and one other person or me and one other person for

10 the most part. So we were -- our "operation" was

11 either two or three brokers at a time, and I don't

12 know how many there is. Five maybe in the Chicago

13 office, seven. I don't know.

14 BY MR. BURDEN:

15 Q So these other former Long Leaf

16 brokers, Mr. Prieto, Luis Molina, Mr. Sears, did

17 they work with you and Mr. Leeney on continuing to

18 solicit for these spread trades?

19 A I mean, we don't -- I don't know.

20 It's kind of a weird question because we're not --

21 we're just soliciting. Like I don't think the

22 trade is for the spread trades. I don't know --

23 Q Let me ask you a different way.

24 A Yeah.

Page 396

1 Q You know, did you and Mr. Leeney work

2 with Mr. Prieto, Mr. Sears and Mr. Molina while you

3 were at Postrock?

4 A Yeah, yeah. Like we kind of did the same

5 system where like they would set up appointments.

6 Q Got it.

7 A Yeah.

8 MR. BURDEN: All right. Thank you.

9 Mr. May, if you want to --

10 Q This is actually the part I'm supposed

11 to say, Mr. Ruth, is there anything you wish to

12 add to your testimony or to clarify with respect

13 to your testimony?

14 MR. MAY: Prior to me asking you

15 questions.

16 A There was one thing. Oh, I know

17 we kept talking a lot about like the compliance

18 department and then I would -- you would say

19 Mr. Evans. Towards the end of my tenure there

20 was another gentleman who was I guess part of that

21 operation. I don't know what his official role was,

22 but it would be Brian Adams.

23 BY MR. BURDEN:

24 Q And he was part of the compliance group?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 393 - 396

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 102 of 115 PageID #:2149
Page 397

1 A I guess, because there was things --

2 or I don't know if he was just like an assistant

3 to Mr. Evans. I don't know. It was -- I don't

4 know. It was a weird situation.

5 Q Is there anything else with respect

6 to your testimony that you would like to clarify

7 or expound upon?

8 MR. MAY: Why don't you hold that --

9 THE WITNESS: Yes.

10 MR. MAY: -- and I'll ask you the

11 questions. And then if you feel that you

12 still want to add something after that,

13 we'll come back to it.

14 THE WITNESS: Sure.

15 MR. MAY: How's that sound?

16 MR. BURDEN: The reason I'm doing this

17 is I have never been in testimony, and it's

18 not sort of enshrined in our procedures, where

19 counsel for the witness gets a redirect, you

20 know. And I guess I don't mind and there's no

21 reason not to, except that we never ever do it.

22 And I sort of thought it was a good vehicle,

23 since he's represented by counsel, to sort

24 of clarify or set -- you know, correct any

Page 398

1 previous testimony. But it kind of sounds

2 like Mr. Ruth has made the corrections that

3 he wants to make or expound to the extent he

4 wants to, and I wanted to close that out. And

5 if what you're doing is something else --

6 MR. MAY: Well, can you -- I think I'm

7 probably going to be a lot more thorough than

8 he is. I don't know if he can recall the prior

9 testimony. I mean, do you want to ask him about

10 adding anything to his testimony today? I think

11 that might be easier for him.

12 BY MR. BURDEN:

13 Q Sure. Do you want to add something to

14 your testimony today?

15 MR. MAY: About your testimony today.

16 A No. I mean, off the stuff you gave me,

17 no.

18 BY MR. BURDEN:

19 Q What about your testimony generally?

20 A I mean, the things I would like to add is

21 some of the documents that I provided you.

22 Q Okay. Well, do you want to take a

23 look at those again? If you want to confer with

24 your counsel, you can.

Page 399

1 MR. BURDEN: I'll tell you guys what I am

2 not going to let happen is a lengthy redirect of

3 all the exhibits from the last two. If there's

4 something you want to clarify or add to your

5 testimony, we can do that. Do you guys want

6 some time?

7 MR. MAY: I have some questions I want

8 to ask him about the documents.

9 MR. BURDEN: Yeah, you don't get

10 to ask those questions in my investigative

11 testimony. Why don't you guys confer, see

12 if there's something you want to add to your

13 testimony or correct, and we'll go back. And

14 if you want to trot those out, we can do that.

15 MR. MAY: All right. So I'm not going to

16 be able to ask him the questions that I want?

17 MR. BURDEN: No. Have you not done one

18 of these before?

19 MR. MAY: Sure, I have.

20 MR. BURDEN: When?

21 MR. MAY: All the time.

22 MR. BURDEN: Yeah. With whom?

23 MR. MAY: CFTC, NFA, FINRA.

24 MR. BURDEN: Who in this office has

Page 400

1 let you do a lengthy redirect?

2 MR. MAY: I'm not doing a redirect.

3 I'm asking him some clarifying questions.

4 MR. BURDEN: Okay. Let me give you guys

5 a couple minutes to confer.

6 MR. MAY: Sure.

7 (Whereupon a recess was taken from

8 3:42 p.m., to 3:48 p.m., after which

9 the following proceedings were had:)

10 BY MR. BURDEN:

11 Q All right. Mr. Ruth, is there anything

12 you wish to add to your testimony or clarify or

13 correct?

14 A Yeah. I'm going to do some clarifications

15 with the help of my counsel here.

16 MR. BURDEN: All right.

17 EXAMINATION

18 BY MR. MAY:

19 Q So, Mr. Ruth, I've got the documents

20 from our first time on September 26th, and we're

21 going to share them. So I'm going to put them

22 between you and I. Can you tell us again when you

23 worked for Long Leaf Trading?

24 A I think my first day was March 13,

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 397 - 400

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 103 of 115 PageID #:2150
Page 401

1 2015 through maybe the last Friday in August

2 of 2017.

3 Q So that's approximately --

4 A Two and a half years maybe.

5 Q From the end of your tenure at Long Leaf?

6 A Yeah, beginning to end.

7 Q Okay. And what about the beginning?

8 So you worked there for two and a half years. How

9 long ago from March of '15 to today?

10 A Four and a half years ago.

11 Q Okay. And you were asked a number

12 of questions, a number of emails, a number of

13 documents, and you were shown some of them. Would

14 it be difficult for you to answer some of those

15 questions based on the length of time that's

16 transpired?

17 A Yes.

18 Q I have another clarifying question for

19 you, and I believe this was part of your testimony

20 but I want to make sure. Did you come up with trade

21 ideas at Long Leaf Trading?

22 A No.

23 Q When you were an associated person

24 at Long Leaf Trading, what were your primary job

Page 402

1 responsibilities?

2 A I mean, to -- I guess the primary

3 responsibility was open up accounts specifically

4 for the Time Means Money program.

5 Q And is there anything else?

6 A I mean, that's my primary duty, yeah.

7 Q Okay. Who was responsible at Long Leaf

8 Trading for obtaining authorization from the clients

9 to trade?

10 A Whoever the assigned broker is for the

11 account.

12 Q So if it was your assigned account, that

13 would be your responsibility?

14 A Correct.

15 Q I believe you talked about maybe

16 the difference between time versus -- TMM, what

17 does TMM stand for again?

18 A Time Means Money.

19 Q Okay. And maybe traditional brokerage.

20 Do you recall that testimony?

21 A Parts of it.

22 Q How is TMM different than traditional

23 brokerage?

24 A TMM is like a system that the

Page 403

1 broker knows what's going on and the client knows

2 what's going on before it happens in terms of the

3 structure, like the number of trades, when things

4 are going to happen and things of that nature

5 whereas traditional brokerage, everything is at

6 random.

7 Q Okay. I'll make a statement. You

8 tell me if it's true. And I believe you mentioned

9 this before, but I want to clarify it. For a Time

10 Means Money client, would they know going in what

11 they -- what the maximum amount they could lose was?

12 A For a specific trade?

13 Q Yes, or let's say for a specific month.

14 A Yeah. I mean, when we obtain their

15 permission, we would generally tell them what the

16 profit potential and the loss potential was on the

17 specific trade.

18 Q And how could you know what the loss

19 potential was?

20 A Because we only use spread positions.

21 Q Anything else?

22 A No.

23 Q Would you know -- were you writing

24 options with Time Means Money or were you buying

Page 404

1 options?

2 A We were selling options, yeah.

3 Q Okay. Would that tell you --

4 A Well, actually --

5 Q -- how much you could lose or gain?

6 A -- the net position is that we're

7 selling options, but in an option spread you are

8 buying and selling an option so ...

9 Q Okay.

10 A But we were credit spreads, meaning

11 that there was a net, you know, credit balance

12 based off the option position.

13 Q Okay. And do you recall any

14 testimony about -- just asking you a clarifying

15 question about the number -- let's talk about the

16 total number of accounts you had while you were

17 at Long Leaf Trading Group.

18 A I would say somewhere around a hundred.

19 Q Okay. And what was the most you had

20 at any one time?

21 A From what I recall, 67.

22 Q I had a question about you and another

23 clarifying question. You were presented with a

24 number of emails that were sent out and a number

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 401 - 404

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 104 of 115 PageID #:2151
Page 405

1 of scripts or a number of documents. Were the

2 documents that you used in talking to clients

3 at Long Leaf Trading, were those approved by the

4 compliance department before you would use them?

5 A Yes.

6 Q Can you direct your attention

7 to Exhibit 122. That would have been from the

8 first time we came. We have to share. Familiarize

9 yourself with the email.

10 A Yep.

11 Q Do you recall the CFTC presenting you

12 with this email in your prior testimony?

13 A Yes.

14 Q Okay. And who was the email from?

15 A Myself.

16 Q And who is it to?

17 A Tim Evans.

18 Q And who's the subject?

19 A Harish Patel.

20 Q What can you glean from this email?

21 A What do you mean by glean?

22 Q Okay. So this is the amount that was

23 started with and the amount that it was ended with.

24 Can you tell what the P&L is?

Page 406

1 A Yeah.

2 Q And what's that?

3 A It's a total loss of $16,457.60.

4 Q And what's the total commissions?

5 A $29,820.

6 Q In comparing the total loss and

7 the total commissions, can you reach any sort of

8 conclusion?

9 A There was profitable trading at some point.

10 Q Okay. Directing your attention to

11 CFTC Exhibit 125, can you take a look at that?

12 A Yes.

13 Q I want you to take a look. Okay.

14 And there's an email from a Steve Beranek --

15 A Beranek.

16 Q -- B-e-r-a-n-e-k, to Jeremy Ruth. I'm

17 talking about the one dated Saturday, October 2016.

18 Could you tell me who Steve Beranek is?

19 A He was a customer of mine.

20 Q Okay. And what is Mr. Beranek's email

21 address?

22 A technicalmanagement@comcast.net.

23 Q And what sort of business is Mr. Beranek

24 in?

Page 407

1 A He's a resident -- or a registered

2 investment advisor.

3 Q Okay. And so that's not a commodity

4 or futures designation, is it?

5 A No. He's securities.

6 Q And so is -- does he manage money for

7 other investors?

8 A Yes.

9 Q Do you recall some prior testimony

10 about opening up accounts at Gain, the FCM that

11 was for Long Leaf Trading?

12 A Yes.

13 Q In looking at the documents the CFTC

14 gave you either on the 26th or 27th of September

15 and today, did you see any account opening documents

16 for any of the customers you had at Long Leaf

17 Trading?

18 A Yes.

19 Q You did?

20 A What do you like --

21 Q Account opening documents, documents

22 you would need to open up a commodity account at

23 an FCM.

24 A Yes.

Page 408

1 Q What documents did you see?

2 A A customer agreement, CFTC regulation

3 risk disclosures, NFA Rule -- I think it's like 2-30

4 risk disclosures, W-9s, electronic transmissions

5 trading, all the stuff required by the FCM.

6 Q Okay. If some of those documents

7 were missing and not completed, would Gain Capital

8 open an account?

9 A Absolutely not.

10 Q And you mentioned some other disclosures.

11 Do you happen to know what some of the disclosures

12 are in, say, CFTC --

13 A Yeah.

14 Q Hold on. You've got to let me finish. --

15 CFTC Regulation 1.55?

16 A I think it has to do with customers

17 attesting that they're using genuine risk capital

18 and that they understand that there's risk in

19 trading and loss and that spreads don't necessarily

20 put you in a better position or option spreads and

21 things of that nature.

22 Q I believe in -- and we'll be getting

23 to this hopefully if we can hear one of the tapes.

24 But you used the term risk capital, and I believe

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 405 - 408

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 105 of 115 PageID #:2152
Page 409

1 I saw that in some of the documents. What is

2 your understanding of risk capital?

3 A It's money that you have that if you

4 were no longer to have it, you know, you wouldn't

5 have to shut down your operation or, I don't know,

6 change your lifestyle or anything of that nature.

7 Q So let me see if I understand that.

8 The risk capital is if you were to lose that

9 capital, it wouldn't affect maybe the quality of

10 your life?

11 A Correct.

12 Q And explain to me -- using that term

13 risk capital and the customers you had at Long

14 Leaf Trading, I believe you mentioned it was a

15 high of 67 at one point and maybe an estimate of

16 around a hundred during your time period. With

17 those customers, were you using their risk capital?

18 Were you using more than their risk capital?

19 I mean, walk me through that.

20 A I mean, I would like to rephrase that

21 where they are using their risk capital. I'm not

22 using anything.

23 Q Okay.

24 A But, yeah, it's -- you know, during

Page 410

1 the solicitation process we use the term risk

2 capital, you know. They attest to that they're

3 using genuine risk capital. It's disclosed multiple

4 times throughout multiple stages of the process, and

5 even after they still funded the account with their

6 risk capital we ask them again, you know, to make

7 sure that they understand that they're using their

8 risk capital.

9 Q Do you have an understanding of maybe

10 an average amount that -- I believe you testified

11 today you were asked -- we listened to a second

12 phone call today, and I forget the name of the

13 gentleman, but I think you were talking about

14 maybe his account was aberrationally high.

15 A Yeah, you're referring to the Jay

16 Caldwell call. I think he started off an account

17 with a hundred thousand dollars of risk capital.

18 I think it was more normal for me to have like

19 $25,000.

20 Q You anticipated my next question.

21 A Yeah.

22 Q Directing your attention to CFTC

23 Exhibit 132, could you take a look at that?

24 A Um-hmm.

Page 411

1 Q And I believe we mentioned this last

2 time, but there's an email from a Jeremy Ruth

3 to James Leeney on August 29, 2017 at 1:43 p.m.

4 Do you believe that you sent this email from --

5 A No.

6 Q -- the Long Leaf Trading email --

7 A No.

8 Q -- system? And why is that?

9 A Because I was no longer employed there.

10 Q Did anyone else have access to your email?

11 A Yeah, Tim Evans.

12 Q Okay.

13 A As the administrator.

14 Q And after you were no longer working

15 for Long Leaf Trading, you didn't know whether

16 they continued to use that email address, is that

17 a fair statement?

18 A Now I know that they did because I'm seeing

19 evidence of it right here.

20 Q And did you ever have a client named

21 Karl Reimer?

22 A That was a client that was maybe

23 passed on to me in the last month or so of me

24 being at Long Leaf.

Page 412

1 Q Okay. In your testimony I believe

2 from the 26th or 27th there was a percentage given

3 of option trades that expired worthless. Do you

4 recall that testimony?

5 A Yes.

6 Q Okay. And do you happen to know where

7 that percentage came from?

8 A Yeah. There was a study that the

9 CME Group put out that's based off of data that

10 they collected in some markets in '97, '98, '99.

11 Q And did you read the study?

12 A I've read the tables within the study, yes.

13 Q Okay. Directing your attention to

14 CFTC Exhibit 133, that's the phone call.

15 MR. MAY: Can we play the phone call?

16 MS. STREIT: What do you plan to do with

17 the phone call?

18 MR. MAY: I just had to ask him a couple

19 questions about things that were in the phone

20 call.

21 MS. STREIT: I mean, the phone call is

22 what the phone call is.

23 MR. MAY: I know, but I was only

24 going to play it just on the portions that

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 409 - 412

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 106 of 115 PageID #:2153
Page 413

1 you played to him. I think there was a couple

2 clarifying questions in that. I'm not going

3 to ask about --

4 MS. STREIT: Yeah, we're not going

5 to go through the whole hour-long phone call.

6 MR. BURDEN: I can play it for --

7 MR. MAY: Yeah, I was going to ask --

8 I have some time parts that you played and

9 they're very, very short snippets. It's like,

10 you know, one minute or something like that.

11 MR. BURDEN: Let me call it up. It'll

12 take a couple minutes, though.

13 MR. MAY: Sure thing.

14 MR. BURDEN: Let's go off the record.

15 (Whereupon a recess was taken from

16 4:06 p.m., to 4:10 p.m., after which

17 the following proceedings were had:)

18 MR. BURDEN: So we're going to start

19 at 1:37:18, if that's all right.

20 MR. MAY: That's okay.

21 MR. BURDEN: And this is Exhibit 133.

22 (Whereupon the audio was played.)

23 MR. MAY: Can you pause it? What are we

24 at now?

Page 414

1 MR. BURDEN: We're at 1:41:06.

2 BY MR. MAY:

3 Q Okay. Mr. Ruth --

4 A Yes.

5 Q -- did you listen to the prior conversation

6 that was played?

7 A Yes.

8 Q Is that your voice?

9 A Yes.

10 Q Do you recognize the person who was on

11 the other end of the line?

12 A No.

13 Q Okay. I just had some questions for

14 you. There was some language used and everything

15 like that, and maybe you can kind of explain a

16 little bit what that sort of thing means. There

17 was a reference to current market conditions. Why

18 is that important? Why would you be communicating

19 that to a client?

20 A I don't know. Maybe to talk about

21 volatility.

22 Q Okay. Well, why is volatility important?

23 A Volatility is important when selling

24 options because an increase in volatility gives

Page 415

1 you the ability to collect more premium. When

2 you collect more premium, you reduce more risk.

3 Q Okay. And there was a mention on

4 the call of a return to risk capital. I believe

5 you mentioned that before but, again, why is that

6 important? Why would you be communicating that

7 to a client?

8 A I don't know. Are you talking about why

9 am I using the word risk capital?

10 Q Well, yeah. Why are you using the word

11 risk capital and what are you communicating to the

12 client when you use that term?

13 A Yeah. I use the term risk capital

14 because I only want them to utilize risk capital

15 in their investment if they're going to be, you

16 know, opening an account with us or Long Leaf,

17 and yeah.

18 Q I think you mentioned volatility.

19 You used the term if things go favorably. I want

20 to ask you a question. Based on the use of that

21 term, can you tell me if the thing that you were

22 talking about with this particular client was a

23 hypothetical?

24 A Yes, yeah. I mean, obviously because

Page 416

1 I'm using the terminology if things go favorably.

2 So "if" refers to a hypothetical.

3 Q Okay. And what about the term targeted

4 return? Based on that, would that also indicate --

5 would it indicate or not indicate a hypothetical?

6 A Yeah. Well, the targeted return

7 is not a specific amount because the client gets

8 to determine what their targeted return is.

9 Q Okay. And what about the term "I think

10 I can show you"? Does that indicate to you that

11 the conversation with the client is a hypothetical

12 or not?

13 A Yes.

14 Q Okay. Directing your attention to

15 CFTC Exhibit 134, which I believe we're sharing.

16 Do you want to familiarize yourself with that again?

17 A I'm good.

18 Q This appears to be an email from

19 Tim Evans dated September 7, 2016 to Jeremy Ruth.

20 The subject is Demo Script Senior. The attachments

21 are Demo Script Time Means Money Senior Broker.docx.

22 Directing your attention to page 1, do you see that

23 there's halfway down, approximately halfway down

24 under Title & Risk Disclosures there's some

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 413 - 416

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 107 of 115 PageID #:2154
Page 417

1 pictures? Do you see that on this document?

2 A Yes.

3 Q Okay. And the language looks pretty

4 small, but what sort of risk disclosures do you

5 think those are?

6 A I believe that's the -- I think

7 there's multiple risk disclosures, but there's --

8 I don't know. Those are the preapproved NFA risk

9 disclosures or combinations of them.

10 Q And are those the same risk disclosures

11 that are used or required by Gain to open up an

12 account at an FCM?

13 A Yeah.

14 Q Directing your attention to page 7.

15 Well, strike that. Directing your attention to

16 page 4, if you go all the way down to 7, Introduce

17 Time Decay, what is that referring to in this

18 document?

19 A We're informing the potential

20 customer that -- about the concept of time decay --

21 Q And what is that?

22 A -- from an introductory standpoint.

23 Time decay?

24 Q Yes.

Page 418

1 A Time decay is, I don't know, an event

2 that occurs during an option period.

3 Q And what is the result of time decay?

4 A The option becomes less valuable.

5 Q As it becomes -- as it gets closer to --

6 A Expiration.

7 Q Okay. Directing your attention

8 to page 7, about halfway down it says, No. 11,

9 NFA Company Record. What did that -- why is that

10 in this document?

11 A For credibility purposes.

12 Q Okay. And so you're letting a prospect

13 know that the company doesn't have an NFA record?

14 A At the time, yeah. At one point I think

15 the company did have an NFA record.

16 Q Well, let's talk about that NFA record.

17 Is it that the company at one point did not have

18 any adverse marks on its NFA record? Is that what

19 it's referring to?

20 A Yeah. I mean, I don't know that of

21 this specific script at this time, but the company

22 did not have any adverse marks until an audit. I

23 guess Tim Evans didn't do the AML annual audit and

24 they got -- he got fined by the NFA.

Page 419

1 Q Okay. And directing your attention

2 to page -- well, actually, let's stay on company

3 NFA record. Let me ask you about your NFA record.

4 Do you recall the CFTC asking a bunch of questions

5 about maybe some potential customer complaints?

6 A Correct.

7 Q And I believe those were Mr. Okey,

8 is that right?

9 A No.

10 Q Okay. What about Mr. Patel?

11 A Yes. Oh, Oteh Okey, is that what you're

12 saying?

13 Q I believe that was the first one.

14 A Yeah.

15 Q Sitting here today, do you happen

16 to know if you have any adverse marks on your

17 NFA record?

18 A I do not.

19 Q No customer complaints?

20 A Not that I know of.

21 Q Directing your attention to CFTC

22 Exhibit 134 on page 24. Oh, I'm sorry. I think I

23 have the numbers mixed up. Directing your attention

24 to page 16 on Exhibit 134, and this is a number that

Page 420

1 says 24, The Greeks. Could you tell me why that's

2 in this document? What does the Greeks refer to?

3 A The Greeks refer to the option

4 Greeks, which were I guess mathematical terms of

5 how you determine values of option pricing.

6 Q And directing your attention to page 25

7 of Exhibit 134, it's -- No. 36 says No Buying

8 Decision Today. What does that mean?

9 A We're informing the client that

10 we're not asking them to buy anything, to open

11 an account or anything, pressure them into doing

12 anything without giving them more information.

13 Q Okay. And would you describe that --

14 well, you had your prior testimony. Does that

15 comport with what I'll call a low-pressure sales

16 process?

17 A Yeah. I mean, I don't think --

18 I don't talk to somebody -- I think I talk to

19 somebody probably for about four hours before I ask

20 them for their business.

21 Q And directing your attention to CFTC

22 Exhibit 134, the attachments, pages 1 through 30,

23 was this a document that would have been approved

24 by the compliance department at Long Leaf Trading?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 417 - 420

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 108 of 115 PageID #:2155
Page 421

1 A This document?

2 Q Yes.

3 A Yes.

4 Q Do you recall testimony or questions

5 you received about performance that customers at

6 Long Leaf Trading incurred or had?

7 A Do I recall questions about performance?

8 Q Yes.

9 A Yeah.

10 Q Okay. Did you ever see anything from

11 a regulator or the AP or the firm that looked to be

12 something along the lines of official performance,

13 audited performance, anything like that during your

14 tenure -- or actually while you were at Long Leaf

15 or thereafter?

16 A No.

17 Q Do you recall questions or testimony about

18 the concept that past performance isn't indicative

19 of future results?

20 A Yes.

21 Q Okay. And do you have any idea

22 of the origin of that concept? Do you know where

23 it comes from?

24 A It comes from CFTC and NFA disclosures.

Page 422

1 Q And would that be the kind of

2 disclosures that were referenced in account opening

3 documents?

4 A Yes, and as long -- and as part of the

5 sales solicitation process multiple times.

6 Q Okay. And do you think that that is

7 somewhere in what we were referring to, Exhibit 134,

8 page 1 where it says Title and Risk Disclosure? Is

9 that where you're discussing it?

10 A Yes. If you look at subsection 2,

11 letter A, Risk Disclosure, and then verbally

12 saying in addition to the visual but first I want

13 to disclose that this is a solicitation to enter

14 into an investment opportunity and there are

15 risks associated with this and all investment

16 opportunities for that matter. So understand

17 that past performance is not necessarily indicative

18 of future performance.

19 Q So it's read as well as shown?

20 A Yes, in the end of the presentation

21 as well.

22 Q Could you direct me to that?

23 A There (indicating). It's brought up

24 as a visual right here if you look at the slides.

Page 423

1 Q And you're discussing --

2 A It's not --

3 Q Which page are you talking about?

4 A The risk disclosure again is done

5 at the end of the presentation before --

6 Q Okay.

7 MR. BURDEN: Sorry. Could I have the

8 page on that, please.

9 THE WITNESS: It's not in the script.

10 It's in the slide. So I think it would be

11 in the Power Point --

12 MR. BURDEN: Got it.

13 THE WITNESS: -- presentation.

14 BY MR. MAY:

15 Q Okay. We can put these away.

16 So directing your attention to the exhibits we

17 used today, CFTC Exhibit 135, can you take a look

18 at that?

19 A Yeah.

20 Q Directing your attention to the document

21 marked Ruth 037.

22 A Yep.

23 Q Do you recall testimony about negative

24 marks on your -- I believe you described it as your

Page 424

1 NFA record or the lack of marks, negative marks

2 on your NFA record?

3 A I don't have any marks on my NFA record --

4 Q Right, okay.

5 A -- that I know of.

6 Q Okay. And where would one go to look

7 for that?

8 A I've seen something called BASIC through

9 the NFA website.

10 Q Okay. And directing -- well, do you

11 see on document Ruth 037 on CFTC Exhibit 135, could

12 you take a look at a document that says Liability

13 Release Form?

14 A Yes.

15 Q Okay. Looking at the second paragraph

16 where it starts, "It is understood," do you see

17 that?

18 A Correct.

19 Q Okay. Do you believe that looking

20 at that sentence, that this document would ban a

21 client from posting a negative review after signing

22 this document?

23 A I don't think it bans them. I just

24 think that it -- that they essentially could be

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 421 - 424

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 109 of 115 PageID #:2156
Page 425

1 subject to civil penalties in the event that they

2 did violate the terms of the release.

3 Q Are they giving up the right to post

4 something negative, do you think, based on this

5 language?

6 A Yes.

7 Q Directing your attention to CFTC

8 Exhibit 135, document Ruth -- marked Ruth 038

9 and Ruth 039, these are I believe testimony

10 from a -- I'm sorry, documents from an attorney,

11 Thomas F. Burke. Could you take a look at those

12 bills and see if there's a reference made to any

13 particular client in the services include portions?

14 A It does not.

15 Q Okay. Directing your attention to

16 C F T C Exhibit 136, which I believe is Bates stamped

17 Ruth 017 through Ruth 023, could you direct your --

18 directing your attention to page Ruth 022, go down

19 to the third --

20 A Wait. Ruth 22?

21 Q 022. It's on CFTC Exhibit 136. I believe

22 you're looking at 135.

23 A Oh, okay. 022?

24 Q Yes, the third paragraph down.

Page 426

1 A Yep.

2 Q The third full paragraph down starting

3 with, "Securities brokers have a duty to, 1."

4 Have you found that?

5 A Okay.

6 Q Have you found that?

7 A Yeah.

8 Q Okay. Let me back up. Who is Priscilla

9 Lamar?

10 A Priscilla Lamar was a customer of mine at

11 Long Leaf Trading Group.

12 Q Okay. And this is a letter from

13 her attorney, CFTC Exhibit 136, is that correct?

14 A CFTC 136, yes, that's my understanding.

15 Q Okay. And were you a securities broker

16 to Priscilla Lamar?

17 A No.

18 Q What kind of broker were you?

19 A Commodity broker.

20 Q Directing your attention to CFTC

21 Exhibit 136, page Ruth 020, do you see that?

22 A CFTC, I'm sorry, what?

23 Q 136. The demand letter from Ms. Lamar's

24 attorney, the document Bates stamped in the bottom

Page 427

1 right corner Ruth 020.

2 A Yep.

3 Q Do you see the first full paragraph

4 starting with, "Mr. Ruth and other Long Leaf

5 employees on behalf of Long Leaf and through Gain

6 also engaged in churning in violation of California

7 Civil Code Section 3294 and SEC Rule 15c1-7"?

8 Do you see that?

9 A Yes.

10 Q Okay. I believe you just testified

11 you're a commodities broker. Are you subject to

12 SEC rules, to your knowledge?

13 A Not to my knowledge.

14 Q Directing your attention to

15 CFTC Exhibit -- well, I believe this is Group

16 Exhibit 136, the document entitled at the bottom

17 right corner Ruth 024. Are you there?

18 A Yep.

19 Q Okay. Halfway down on the first

20 numbered paragraph do you see the language that

21 says -- starts, "Nothing contained herein is to be

22 construed as an admission or evidence of liability

23 by LLTG and Gain"? Do you see that?

24 A Yes.

Page 428

1 Q Okay. And do you see the last

2 sentence in that paragraph, "Rather, each party

3 has entered into this Settlement Agreement solely

4 to avoid expense of litigation"?

5 A Yes.

6 Q Directing your attention to CFTC

7 Exhibit 136 and the document marked in the bottom

8 right corner Ruth 025.

9 A 25?

10 Q Ruth 025.

11 A Yep.

12 Q Do you see the numbered paragraph that

13 starts with the No. 4?

14 A Yeah.

15 Q Could you read the first and second

16 sentence for me?

17 A "Customer covenants not to disclose

18 the terms of this Settlement Agreement and Release.

19 Customer agrees to pay LLTG as liquidated damages

20 a sum equal to $500 for each such occurrence if

21 the terms of this Settlement Agreement and Release

22 are disclosed by Customer. Notwithstanding the

23 foregoing, Customer release of information to the

24 Commodity Futures Trading Commission, the National

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 425 - 428

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 110 of 115 PageID #:2157
Page 429

1 Futures Association or in compliance with a lawful

2 subpoena shall not be construed as a violation of

3 this provision."

4 Q Okay. Looking at that -- signatures

5 lower down on that same page, did you sign this

6 document?

7 A No.

8 Q Directing your attention to CFTC

9 Exhibit 137, and in the bottom right corner this

10 is a one-pager that's marked Ruth 028.

11 A Yep.

12 Q Look at the bottom email from you. Who

13 are you writing an email to?

14 A Tim Evans.

15 Q Okay. And what was the purpose for this

16 email?

17 A I'm trying to find out -- it was

18 brought to my attention over a phone call with

19 Rebecca Wing that Priscilla Lamar, you know, she

20 just told me about this. I didn't have any of

21 the -- I didn't have, you know, the complaint from

22 the attorney, the settlement agreement and all this

23 kind of stuff, and she's very slow moving. And so

24 I reached out to Tim because I wanted to find out

Page 430

1 about it now because this is -- I think it's odd

2 that something that happened, I don't know, like

3 a year ago was just brought to my attention a year

4 later.

5 Q And what if anything did Mr. Evans

6 tell you? And I'm directing your attention to

7 the third sentence in his response to your email.

8 A "There is nothing to respond to,

9 as I and everyone at Long Leaf acted in a legal

10 and ethical manner while I owned the company."

11 Q And the fourth sentence?

12 A "That included the entirety of your

13 employment there."

14 Q Okay. Directing your attention to CFTC

15 Exhibit 140, do you have that one?

16 A Which one?

17 Q 140.

18 A All right.

19 Q Actually, let's put 140 away for

20 a second. Sorry about that. Let's look at CFTC

21 Exhibit 139.

22 A Okay.

23 Q Do you recall your testimony and being

24 asked about this document?

Page 431

1 A Yes.

2 Q I believe your testimony was you

3 expressed some skepticism about this document?

4 A That's correct.

5 Q And what were the reasons for your

6 skepticism?

7 A Tim Evans already had access to all the

8 documents because he's the compliance department.

9 He approves them all and they're on the shared

10 drive, so why would he ask me for a copy of them.

11 And then going back to 140, there's like six days

12 in between of my email address sending it to him.

13 Again, documents that he already has.

14 Q What's the significance of six days?

15 A That's not something -- I wouldn't respond

16 to a superior six days later.

17 Q And you would respond sooner or later?

18 A Sooner.

19 Q Directing your attention to CFTC

20 Exhibit 141, and this is the email from Jeremy

21 Ruth to Tim Evans dated 4/8/2017. Subject is

22 Custom. The attachments are Custom Version 3.pptx.

23 Can you look at the second page of the attachment?

24 A Yes.

Page 432

1 Q What is this?

2 A The risk disclosure slide.

3 Q Have we seen this before?

4 A Yes.

5 Q Where?

6 A In the senior broker demo script that

7 we were previously looking at.

8 Q So this is a slide of a presentation,

9 is that correct, CFTC Exhibit 141?

10 A Yes.

11 Q And so walk me through how this is

12 displayed to a potential client.

13 A We're on the phone with them. They're

14 on their phone. And then this is utilized over

15 online software called Join.me, which gives them

16 the ability to view this from their home computer

17 or laptop or tablet, whatever.

18 Q Okay. Could you turn to the page

19 that starts in this CFTC Exhibit 141, it says

20 Equally Weighted Assets and there's a circle that

21 says 76.5 percent asterisk.

22 A I'm sorry. Yes, yes. Where are you

23 seeing that?

24 Q It's towards the back.

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 429 - 432

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 111 of 115 PageID #:2158
Page 433

1 A Oh, there we go. Yep.

2 Q What is being depicted on this slide?

3 A It's talking about equally weighted assets.

4 Q And the 76.5 percent, what's the importance

5 of that?

6 A It's the study that's being cited.

7 Q Okay. And what does it mean that

8 76.5 percent of all options held to expiration at

9 the Chicago Mercantile Exchange expire worthless?

10 Why is that important?

11 A Why is it important?

12 Q Um-hmm.

13 A Because it -- an investor, I guess

14 you could look at it as you have a -- it could tell

15 an investor -- I mean, you can tell a lot of things

16 from it. An investor could say, well, the chances

17 of buying options and them becoming profitable is

18 not good. You could say, well, it's a zero sum

19 game. So for every winner -- loser there has to

20 be a winner. So maybe if I'm on the other side

21 of the transaction, that can be advantageous for

22 me. It's a lot of things.

23 Q Okay. And is it true that the study

24 source is cited in this slide?

Page 434

1 A Yes.

2 Q Okay. And where else have we seen

3 or heard something about roughly 75 percent of

4 options expire worthless if held to expiration?

5 A In the demo script, which is included

6 i n Exhibit 140 and somewhere in there as well

7 (indicating).

8 Q Have we heard any calls where maybe this

9 76.5 percent was cited?

10 A I think in Exhibit 133, talk about

11 it in a recorded phone call that in the event

12 that 76.5 percent of options do expire worthless,

13 there's some quote about that in that phone call.

14 Q Okay. Directing your attention to

15 CFTC Exhibit 110 that's in your pile, it's from

16 today.

17 A All right. 110, gotcha.

18 Q I'm looking at the email from James

19 Leeney at Long Leaf Trading sent on 4/27/17 to

20 Jeremy Ruth at Long Leaf Trading. Subject is Calls

21 to Review. Do you see the part -- it looks like

22 there's a picture of a leaf or something along that

23 line under the language that's James Leeney, senior

24 market strategist, Long Leaf Trading Group.

Page 435

1 A Yeah.

2 Q Could you read the information in the

3 first paragraph under the leaf?

4 A "Trading futures involves risk of

5 loss and is not suitable for all investors. Past

6 performance is not necessarily indicative of future

7 results."

8 Q Okay. And I had a question for you.

9 Was that language included on every email that you

10 would have sent to a customer?

11 A I'm going to say 99.9 percent of the

12 time. If I sent an email from my cell phone would

13 be the only time that it didn't, but I rarely sent

14 an email from my cell phone.

15 Q So was it prepopulated? Did you need to

16 cut and paste it? How did --

17 A No.

18 Q -- it get there?

19 A It's the signature line of my Outlook

20 email.

21 Q Well, directing your attention to

22 C F T C Exhibit 146, it's an email from Jeremy Ruth

23 to Tim Evans dated September 19, 2016. And that

24 looks like a signature line for you, Jeremy Ruth,

Page 436

1 senior commodity associate, Long Leaf Trading

2 Group.

3 A Yep.

4 Q Is that disclosure language that you

5 just read from CFTC Exhibit 110 contained in this

6 email?

7 A Yes.

8 Q Directing your attention to CFTC

9 Exhibit 147 - -

10 A Got it.

11 Q -- I'm going to read -- this

12 is an email purportedly from Jeremy Ruth at

13 longleaftrading.com dated February 6, 2017 to

14 a Vince Prieto and a number of other persons with

15 Long Leaf emails. And the subject is Demo Flake

16 Attempting Reschedule - New List. I'm going to

17 read some language, and I want you to kind of

18 explain what that means. In the first paragraph,

19 "There are 400 leads on this list." Do you see

20 that?

21 A Correct.

22 Q "I expect these to be either reset

23 or moved to not interested." What does that mean?

24 What are you trying to communicate there?

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 433 - 436

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 112 of 115 PageID #:2159
Page 437

1 A To either reset the appointment or

2 to disposition the lead record as not interested,

3 meaning that the client's not interested.

4 Q What happens when the client's not

5 interested? Do they ever get contacted again?

6 A That would be up to Tim Evans, but

7 the solicitation process stops and the lead is

8 essentially dead, and I don't know if they're

9 recycled at a later time or what.

10 Q Okay. Directing your attention to CFTC

11 Exhibit 149.

12 A Gotcha.

13 Q So this -- I'm looking at the bottom

14 of the page. It says it is an email from Jeremy

15 Ruth at Long Leaf Trading Company dated Monday,

16 July 24, 2017 to zinvesting@msn.com. The subject

17 is Emailing Account Documents_Christopher Zolton.

18 What if anything is going on here? And tell me

19 whether this is --

20 A Yeah. I made it part of my process

21 where, you know, during the account opening process,

22 during the application you have the ability as the

23 user to download the account documents. I wanted

24 to make sure that I knew that they had a copy of

Page 438

1 their account documents. So I would send them

2 their account documents through email in addition

3 to that so I can, you know, have a record of the

4 fact that they received the account documents.

5 MS. STREIT: How much more do you have,

6 Mr. May? It's almost 5 o'clock.

7 MR. MAY: Yeah. Maybe --

8 MR. BURDEN: You can go for absolutely

9 as long as you want.

10 MR. MAY: There's -- no. I mean,

11 I probably have less than five minutes.

12 MS. STREIT: All right.

13 MR. MAY: Don't want to ruin anyone's

14 weekend.

15 Q Mr. Ruth, did you have any -- do you

16 recall questions about maybe whether you hired an

17 attorney to assist you in understanding CFTC or NFA

18 rules and requirements?

19 A When?

20 Q Earlier today. Do you recall any questions

21 like that?

22 A Oh, do I recall? Yes.

23 Q Okay. And what was your testimony on that?

24 A No, I'm an AP. I don't own the firm.

Page 439

1 Q You don't what?

2 A Own the firm.

3 Q And do you recall testimony about

4 maybe the reason why account performance was or

5 was not allowed to be produced?

6 A Yes.

7 Q I'm going to make a statement and

8 you tell me if you think it's correct. Do you

9 believe that maybe the CFTC laws or regulations

10 would prohibit production of account performance?

11 A For -- specifically for the Time Means

12 Money program, yes.

13 Q Okay. And what would you expect

14 the possible ramifications if somebody produced

15 something for the Time Means Money program and

16 the performance was inaccurate, let's say either

17 too high or too low, what would be the possible

18 ramifications vis-a-vis a regulator?

19 A I would assume substantial fines, loss

20 of licensing, things of that nature.

21 Q Okay.

22 A But --

23 Q I believe I just have one more

24 question, Mr. Ruth. Do you recall testimony --

Page 440

1 and it happened today. I'll posit that -- about

2 maybe the last day you worked at Long Leaf Trading?

3 A Do I recall the last day I worked at

4 Long Leaf Trading?

5 Q No. Do you recall your testimony about

6 the day --

7 A Yes.

8 Q -- last day you worked at Long Leaf

9 Trading? And I believe you mentioned that the

10 performance was bad, is that --

11 A Of the specific month, yes.

12 Q Okay. Well, that was one of my questions.

13 And --

14 A And when I say bad, I just mean it's

15 a losing month. I don't know how much. I don't

16 know anything. I think in my testimony I

17 represented that like accounts were down 85 percent.

18 To clarify, that would probably be -- I mean, some

19 accounts that I can, you know -- not everybody

20 starts at the same time. Not everybody went through

21 that. But I recall, I don't know, maybe a couple

22 people that were down that much. But that's not

23 representative of all the clients that I had.

24 Q Okay. And then what month was the last

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 437 - 440

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 113 of 115 PageID #:2160
Page 441

1 month you were at Long Leaf Trading?

2 A August 2017.

3 Q Okay. And during the time you were at

4 Long Leaf Trading with the spread trades, how many

5 positions were usually recommended by Mr. Evans?

6 A Hundred percent.

7 Q Well, how many positions would he

8 recommend, option positions? Was it --

9 A Four per month.

10 Q Four per month, okay. So if the

11 performance was bad on a particular month, could

12 you suggest to us, would that be a month where the

13 positions were half winning, half losing?

14 A I mean, it could depend. I mean,

15 you could win three positions and technically

16 you could still lose money on the month depending

17 on how the positions are designed, so ...

18 Q Do you recall the exact specific

19 performance of the four positions in August of

20 2017?

21 A I remember it being a bad month and

22 maybe they all lost. I don't know specifically.

23 Q Okay.

24 A It's a while ago.

Page 442

1 MR. MAY: Okay. I don't have anything

2 else.

3 MR. BURDEN: All right. I've got one

4 more and then I'll ask you guys again if you

5 have followup.

6 FURTHER EXAMINATION

7 BY MR. BURDEN:

8 Q Mr. Ruth, I'm going to read some

9 verbiage to you and I'm going to ask you if you've

10 heard this before, said it before, all right?

11 A Sure.

12 Q All right. These results are based

13 on simulated or hypothetical performance results

14 that have certain inherent limitations. Unlike

15 the results shown in an actual performance record,

16 these results do not represent actual trading.

17 Also, because these trades have not actually been

18 executed, these results may have over the -- may

19 have under or overcompensated for the impact, if

20 any, of certain market factors, such as lack of

21 liquidity. Simulated or hypothetical trading

22 programs in general are also subject to the

23 fact that they are designed with the benefit

24 of hindsight. No representation is being made

Page 443

1 that any account will or is likely to achieve

2 profits or losses similar to those being shown.

3 I know that's a mouthful, but have you heard that

4 before?

5 A That's the disclosure with simulated

6 trading.

7 Q Say that one more time, please.

8 A Disclosure of simulated trading, I believe.

9 Q All right. Is that -- have you ever

10 related that orally to any customers or prospective

11 customers?

12 A I don't think it's applicable to the --

13 Q So let's get into that in a minute, but

14 let me ask you first.

15 A It might have been done in writing through

16 the account forms. I'm not familiar exactly.

17 Q Did you personally --

18 A It's on --

19 Q -- make that disclosure --

20 A No.

21 Q -- to any customers?

22 A I only make the disclosures that were

23 given to me in the script that's approved by the

24 compliance department.

Page 444

1 Q All right. Was this disclosure that

2 I just read from 17 CFR 4.41, was that in any of the

3 materials given to you by compliance?

4 A Unless if they're in the account

5 forms for Gain Capital, that would be the only

6 place I could say. I don't know. Otherwise, no,

7 I did not -- it was not given to me.

8 Q Okay. So that will do it for me.

9 Mr. Ruth, anything else you want to clarify

10 or correct in your testimony over the last two

11 days we've been doing it?

12 A My understanding is that you're

13 investigating Long Leaf Trading Group, and I wanted

14 to throw you a bone here.

15 Q Great. Let's have it.

16 A I found this out from I think this

17 document, which is from Priscilla Lamar's attorney,

18 but it talks about some guy who's a broker at Long

19 Leaf. Well, that brings me to my point. He's not

20 a broker at Long Leaf Trading Group because I think

21 he was acting as a broker unlicensed.

22 Q And who is that person, please.

23 A Andrew Nelson maybe. But I guess he

24 represented -- he talked about me to Priscilla

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 441 - 444

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 114 of 115 PageID #:2161
Page 445

1 Lamar in an untruthful manner.

2 Q How do you know that?

3 A Because I didn't mishandle -- first

4 of all, it said something about mishandling like

5 her funds. Like I don't touch or see her money

6 and I don't make the trades, so I know that. But,

7 yeah, I don't --

8 MR. MAY: What document are you looking at?

9 THE WITNESS: I think it's 136.

10 MR. MAY: CFTC Exhibit 136?

11 THE WITNESS: Yeah.

12 MR. MAY: Okay.

13 A But I think it might be missing the

14 page where it talks about him. I don't know.

15 My point is is that there's an unlicensed broker

16 who, you know, not only through this. I've heard

17 that, that he's been talking to people I know but

18 like, you know, through the grapevine he -- I've

19 been told that he's conducting himself as a broker.

20 So I'm sure you're aware of it, but if not --

21 BY MR. BURDEN:

22 Q Thank you.

23 A You're welcome.

24 MR. MAY: Is that your good deed for

Page 446

1 the day?

2 THE WITNESS: Yes.

3 MR. MAY: Okay.

4 BY MR. BURDEN:

5 Q All right. Any other aspects of your

6 testimony you would like to clarify or correct?

7 A No. I just have a logistical question

8 off the record.

9 MR. BURDEN: Mr. May, anything else?

10 MR. MAY: No. Thank you.

11 MR. BURDEN: Off the record, please.

12 WHICH WERE ALL THE PROCEEDINGS

13 HAD OR OFFERED AT SAID HEARING

14 OF THE ABOVE-ENTITLED CAUSE.

15

16

17

18

19

20

21

22

23

24

Page 447

1 STATE OF ILLINOIS)

 ) SS.

2 COUNTY OF C O O K)

3

4 I, MARY MASLOWSKI, CSR, do hereby

5 certify that I reported in shorthand the proceedings

6 had at the examination under oath aforesaid, and

7 that the foregoing is a true, complete and accurate

8 transcript of the proceedings at said examination

9 under oath as appears from the stenographic notes so

10 taken and transcribed on the 22nd day of October,

11 2019.

12

13

14

15 Certified Shorthand Reporter

16

17

18

19

20

21

22

23

24

[10/11/2019] Ruth, Jeremy 2019-10-11 Pages 445 - 447

Case: 1:20-cv-03758 Document #: 82-6 Filed: 11/05/21 Page 115 of 115 PageID #:2162