UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Commodity Futures Trading Commission, )

)

Plaintiff, )

)

V. ) Case No. 20-3758

)

Long Leaf Trading Group, Inc., ) Hon. Thomas A. Durkin

James A. Donelson, Timothy M. Evans, )

Jeremy S. Ruth, and Andrew D. Nelson, )

Defendants. )

I. RELEVANT PARTIES

independent federal regulatory agency charged by Congress with administering and enforcing

uth Answer ¶

15.)

Answer: Defendant does not dispute.

Answer: Defendant does not dispute.

3. Defendant Jeremy S. Ruth worked for Long Leaf from April 29, 2015, through August

28, 2017. (Id. ¶ 19.)

Answer: Defendant does not dispute.

II. JURISDICTION

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4. This Court has jurisdiction over this action under 28 U.S.C. § 1331 (codifying federal

question jurisdiction) and 28 U.S.C. § 1345 (providing that U.S. district courts have original

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

authorized to sue by Act of Congress).

Answer: Defendant does not dispute.

5. In addition, 7 U.S.C. § 13a-1(a) provides that U.S. district courts have jurisdiction to

hear actions brought by the Commission for injunctive and other relief or to enforce compliance

with the Act whenever it shall appear to the Commission that any person has engaged, is

engaging, or is about to engage in any act or practice constituting a violation of any provision of

the Act or any rule, regulation, or order thereunder.

Answer: Defendant does not dispute.

6. Venue properly lies with this Court pursuant to 7 U.S.C. § 13a-1(e) because Ruth and

the other defendants transacted business in this District, and certain of the acts and practices in

violation of the Act have occurred, are occurring, or are about to occur within this District,

among other places. (Doc. 36, Ruth Answer ¶ 14.)

Answer: Defendant does not dispute.

7. Starting in at least June 2015, Long Leaf began soliciting customers and prospective

customers to participate in -

trading program. (Id. ¶ 26; CFTC Ex. 5331, Ruth Test. 34:14 34:19.)

Answer: Defendant does not dispute. in the sense

that it was not a discretionary trading program executed by Long Leaf with power of

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attorney and was not a fund or a pool. It was a philosophy for how to structure trades and

create a plan to enter the commodities market.

8. Long Leaf provided customers that agreed to participate in the TMM program with

trading recommendations, typically four recommendations every month. (Doc. 36., Ruth Answer

¶ 27.) Each recommendation was for a different spread trade, with each trade typically involving

four out-of-the-money options on futures contracts traded on designated contract markets, i.e.,

exchanges, such as the Chicago Mercantile Exchange and New York Mercantile Exchange. (Id.)

Answer: Defendant does not dispute that Long Leaf provided customers in TMM with

trade recommendations and typically provided about four recommendations per customer

each month. Defendant does not dispute that each recommendation was for a different

spread trade. Defendant disputes that each trade typically involved four out-of-the-money

options on future contracts. Long Leaf did not always recommend four out-of-the-money

does not dispute that all the recommended trades were on designated contract markets but

does dispute that all the recommended trades were on the CMEX or NYMEX.

9. All customers who participated in the TMM program got substantially the same set of

recommendations each month. (CFTC Ex. 533, Ruth Test. 102:1 102:6.)

Answer: Defendant disputes this statement. Long Leaf customized a trade recommendation

recommendations to customers by email or phone. (Doc. 36, Ruth Answer ¶ 30; Doc. 23, Long

Leaf Answer ¶ 30.)

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Answer: Defendant almost always made recommendations to TMM customers by phone

and only approximately five times made recommendations by email.

xt or email to

accept the recommended trades. (Doc. 36, Ruth Answer ¶ 31.)

Answer: Defendant does not dispute that on approximately five occasions he asked a

phone. Defendant disputes that he ever asked permission to execute a trade via text

recommended trade. Defendant is not aware of whether other APs communicated with

customers via text.

12. Long Leaf would forward the customer orders to a futures commission merchant

Answer: Defendant disputes that Long Leaf would forward the customer orders to an

FCM. Defendant would typically take the customer order and give it to Defendant Tim

Excel spreadsheet. Evans would then call an executing broker and instruct them to execute

-up agreement. On occasions where one of

placed by Evans, Defendant would contact Gain Capital to work the order. Gain Capital is

not an FCM.

13. As an IB, Long Leaf earned revenue in the form of commissions when its

recommended trades were executed. (Id. ¶¶ 24, 33.)

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Answer: Defendant does not dispute that Long Leaf earned revenue through commissions

among other streams of revenue.

program participants. (CFTC Ex. 533, Ruth Test. 36:6

Answer: Defendant does not dispute that at times during the second year of his

employment at Long Leaf the majority of his customers were TMM participants. However,

Defendant at all times had two types of customers in addition to TMM participants. Long

Leaf Trading was a full service brokerage working with a wide variety of customer types

stomers for participation

in the TMM program. (Id. at 28:10 28:22, 401:23 402:6.)

Answer: Defendant disputes this statement. His primary responsibility was to solicit

customers for Long Leaf generally as a full service brokerage.

16. In so doing, Ruth utilized a script provided to him by Defendant Timothy Evans,

- owner and CEO. (CFTC Ex. 134, Email from T. Evans to J. Ruth, Sept. 7,

-232:9; see also Doc. 36, Ruth

Answer ¶ 2 (Evans was CEO).)

Answer: Defendant does not dispute. Defendant also had customers, both in TMM and not

in TMM, that he did not solicit.

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17. The script included statements touting the benefits of the TMM program, including

that the TMM program uses short options

-62 (ellipses in

original).)

Answer: Defendant does not dispute that the script contains the quoted statements but

intended to imply a successful result.

18. The script also includes the f

-after-month for 6 years and oversee millions of dollars if we

-9.)

Answer: Defendant does not dispute that the script contains these statements. The

statements quoted here are not in context and are not the entirety of the script.

19. In addition to the script, Ruth used a power point presentation also provided by

Evans to solicit customers. (CFTC Ex. 141, Email from J. Ruth to T. Evans, Apr. 8, 2017,

288:21.) The presentation

features slides illustrating the TMM progra

Ex. 141 at 12, 14.)

Answer: Defendant does not dispute that he used a Power Point presentation that was

provided by Evans. The statement quoted here is not in context and is not the entirety of

the presentation. The slides did not make a representation that the TMM program had an

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annual return of 12%. The slides were used to illustrate the structure of TMM, not the

results.

20. Ruth made the statements featured in the script and presentation, and other similar

statements, to customers and prospective customers throughout his tenure at Long Leaf. (See

CFTC Ex. 533, Ruth Test. 240:20 241:11.)

Answer: Defendant does not dispute that he followed the script and presentation when

soliciting potential TMM customers.

21. For example, on a January 12, 2016, call with then-prospective customer Harish

on the three, you can expect it to be right; in the long run it would generate 1500; and the one

at 00:35:15

-generating process, you know you carry that out for a year,

Answer: Defendant does not dispute he made these statements. However, this does not

present the full context of the conversation, which spanned at least an hour and a half and

included a conversation about the use of credit spreads to define risk customized to the

individual customer. The conversation was not a summary of TMM results, as this

depiction implies. The last quoted statement was made to demonstrate one possible

leverage strategy that could be used to generate a 12% return in a hypothetical scenario,

results would be.

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22. On a February 19, 2016, call with then-prospective customer Janice Janowiak, Ruth

statistical likelihood you will win three of them, giving you a much more predictable path to

hundreds of clients month a

Answer: Defendant does not dispute he made these statements. However, this does not

present the full context of the conversation, which spanned approximately 45 minutes to

over an hour.

23. On an August 17, 2017, call with then-prospective customer Dale Bennett, Ruth

explained that because 76.5% of options expire worthless (according to Ruth), Long Leaf is able

(Id.)

Answer: Defendant does not dispute he made these statements. However, this does not

present the full context of the conversation, which spanned approximately 45 minutes to

over an hour. Defendant also disputes the implication that his statement that 76.5% of

options expire worthless was based solely on his opinion.

(Id. at 00:57:55

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Answer: Defendant does not dispute he made these statements. However, this does not

present the full context of the conversation, which spanned approximately 45 minutes to

over an hour. The quoted statements were made in the larger context of a conversation and

end result of

to get you to reach your 1:05:55.)

Answer: Defendant does not dispute he made these statements. However, this does not

present the full context of the conversation, which spanned approximately 45 minutes to

over an hour and was about how Defendant had not and would not share any previous

results with Bennett and that Bennett should not open an account based on previous

results, but rather based on believing in the structure of TMM.

26. During the period Ruth worked at Long Leaf approximately June 2015 through the

end of August 2017 customers who participated in the TMM program lost more than $3.1

million. (See CFTC Ex. 535, Patrick Decl., Ex. A (showing customer losses by month).)

Answer: Defendant disputes this statement because it is vague and misleading. This

statement does not indicate which customers it refers to or whether those customers were

same period of time or the histo Defendant also disputes

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this because not all options closed within the same calendar month, so a monthly statement

27. Substantially all customers who participated in the TMM program lost money during

that period. (Id. ¶ 17.)

Answer: Defendant disputes this statement because it is misleading and vague. Defendant

did not make recommendations to every customer in TMM.

A. Daily Account Statements

program. (See Doc. 36, Ruth Answer ¶¶ 3, 38.)

Answer: Defendant disputes this statement because for a majority of his tenure at Long

Leaf he did not know the outcome of his custom

statement because it implies that Defendant knew all of his clients would always lose

money, which is not true.

29. Ruth knew this because he received account statements for his customers every day

the markets were open. (Id. ¶ 41; see, e.g., CFTC Ex. 346 at 29-55, Email from Gain Capital to

funded accounts).) Ruth reviewed these statements every day he received them. (CFTC Ex. 533,

Ruth Test. 77:16 78:8.)

Answer: Defendant disputes this because he did receive statements but was not aware of

closed, so a daily account statement doe

performance at the time the statement is printed.

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534, Ruth Dep. 57:16 57:18, 59:21 60:7; CFTC Ex. 346 at 46-47.) The account was assigned to

57:18,

59:21 60:7; CFTC Ex. 346 at 46-47.)

account and his gr

request.

31. Mr. Bruno funded the account with $5,000 in November 2015. (Ex. 534, Ruth Dep.

57:16 57:18, 59:21 60:7.) In the space of seven months, the account had lost substantially all of

its value. (CFTC Ex. 532, M. Bruno account statement, June 8, 2016.) In June 2016, Mr. Bruno

withdrew the $54 remaining in his account. (Id.)

Answer: Defendant does not dispute. Mr. Bruno was an experienced investor with a high

net worth.

B. Customer Complaints

32. Ruth received calls and emails from customers complaining about account

performance. (Doc. 36, Ruth Answer ¶¶ 41, 63; see, e.g., CFTC Ex. 126, Email from J.

Hermanson to J. Ruth, June 14, 2017; CFTC Ex. 128, Email from S. Allen to J. Ruth, May 17,

2017; CFTC Ex. 129, Email from D. Snyder to J. Ruth, June 17, 2017.) He received these

156:1.)

Answer: Defendant does not dispute that he received occasional calls and emails in which

customers complained about their account performance but disputes that these were

formal complaints as that term is used in the industry. Defendant disputes that he received

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33. For example, on August 30, 2016, Long Leaf customer Rob Mixer complained to

balance. At this point, I need a 50%

return on current capital just to get back to where we started a year ago. Even if you met the

Ex. 124.)

Answer: Defendant does not dispute Mr. Mixer made these statements in email. Defendant

disputes that the statement by Mr. Mixer is correct. Mr. Mixer was in control of his

account at all times and continued to trade after making this statement.

34. The next day, however, Ruth wrote an email to prospective customer, David Norris,

generating strategy. This will give you the ability to supplement your part time employment with

that

Answer: Defendant does not dispute that he made this statement via email. However,

bout the structure of options as an investment

vehicle, not about the performance of TMM and the comment was custom tailored to

35. In another example of a customer complaint, customer Steve Beranek sent Ruth an

email on Jan

commissions and fees for the year will surpass my entire $20K in investments, and I have only

lost about 20% of my investment. At this rate in ten years my account balance will be zero and

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Answer: Defendant does not dispute Mr. Beranek made these statements via email.

Defendant disputes the characterization of this statement as a complaint. Mr. Beranek is a

registered investment advisor and was in control of his account and trades at all times.

-

Answer: Defendant does not dispute he made this statement via email. Defendant disputes

the implication that Mr. Beranek was complaining and that Defendant was disregarding

his complaint.

C. Keeping Track of Losses

37. Ruth kept track of results from Long Leaf trading recommendations and emailed

them to other Long Leaf personnel, as set forth in the paragraphs below.

Answer: Defendant disputes that he kept track of results from Long Leaf trading

recommendations for a majority of his tenure at Long Leaf. Defendant kept track of results

for a few months in 2017 as described in the following paragraphs.

38. On April 13, 2017, Ruth emailed follow Long Leaf APs James Leeney and Vince

spreadsheet reflects

net losses of at least $920 on the four trades recommended to customers in March. (Id.)

Answer: Defendant does not dispute that he forwarded this email. Defendant disputes that

a loss of the four trades recommended that month indicates any information about a

Ex. 93.)

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Answer: Defendant does not dispute that he forwarded this email. Defendant disputes that

a loss of the four trades recommended that month indicates any information about a

the four trades recommended in May. (Id.)

Answer: Defendant does not dispute that he forwarded this email. Defendant disputes that

a loss of the four trades recommended that month indicates any information about a

-CEO, Evans, trading results for Long

Leaf customer Harish Patel. (CFTC Ex. 122.) In the email, Ruth noted that Mr. Patel started with

$25,700, ended with $9,200, and lost a total of $16,400. (Id.)

Answer: Defendant does not dispute this. However, Mr. Patel had many successful trades.

42. Despite this knowledge, Ruth sent an email to prospective customer Chris Zolton

later the same day st

Answer: Defendant does not dispute that he made this statement. Defendant disputes the

investment and also disputes the implication that this statement had any relation to

performance. This statement was an explanation of the ability of options of an investment

vehicle.

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43. Ruth did not disclose any historical results from the TMM program, such as annual or

average rates of return, to customers or prospective customers. (CFTC Ex. 533, Ruth Test.

299:10 299:15, 300:23 301:4, 312:4 312:8.)

Answer: Defendant does not dispute this statement. It is a violation of NFA and CFTC

regulations to do so in this situation because TMM accounts were self-directed accounts

and customers could participate or not participate whenever they chose, customer trades

were not uniform, and had different fill prices, different trades, and different commission

rates. The TMM accounts were not a pool of funds. Therefore, a track record of the past

performanc

do. TMM is not a pool or

fund. TMM accounts are individual self-directed accounts. The results of those accounts

are private information reflecting

44. This was pursuant to a policy at Long Leaf instituted by Evans. (Id. at 299:10

299:15; CFTC Ex. 142, Email from T. Evans to J, Ruth, June 1, 2015.)

Answer: Defendant does not dispute that this was a policy of Long Leaf instituted by

should never open any investment account, including a TMM account, based on previous

results, because past results are only indicative of

a request for a track record

Leeney, Apr. 27, 2017.)

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Answer: Defendant does not dispute that he followed the policy and regulations against

providing past results to prospective customers. Defendant disputes that he advised other

APs. Defendant provided an email with an example of a call in which a customer asked him

for a track record and he informed them that he could not provide them with such a

record.

46. Ruth was paid a total of $301,541.39 for his work at Long Leaf Trading. (CFTC Ex.

commissions charged to customers. (Doc. 36, Ruth Answer ¶¶ 51, 56.)

Answer: Defendant does not dispute this statement.

47. For the his first few months at Long Leaf Trading, Ruth was paid $1,500 per month

salary, plus a percentage of the commissions that he helped to generate. (CFTC Ex. 533, Ruth

Test. 31:2 31:20, 32:1 32:5, 32:12 compensation

consisted entirely of commissions. (Id. at 32:12 32:20.)

Answer: Defendant does not dispute this statement.

s/Jeremy S. Ruth

Jeremy S. Ruth

Pro se

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CERTIFICATE OF SERVICE

I, Jeremy S. Ruth, hereby certify that on March 4th, 2022, I provided service to the persons listed

below via email:

Defendants:

Andrew D. Nelson

Pro se

adnelson0503@gmail.com

James M. Falvey

Attorney for Defendant

James A. Donelson & Long Leaf Trading

jimfalvey@yahoo.com

:

Ashley J. Burden

Senior Trial Attorney

aburden@cftc.gov

Joseph C. Platt

Trial Attorney

jplatt@cftc.gov

Elizabeth M. Streit

Chief Trial Attorney

estreit@cftc.gov

Joseph J. Patrick

Investigator

jpatrick@cftc.gov

s/Jeremy S. Ruth

Jeremy S. Ruth

Pro se

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