On March 10, 2011, the Commodity Futures Trading Commission (“CFTC”) filed a Complaint for Injunctive and Other Equitable Relief and For Civil Penalties Under the Commodity Exchange Act, as amended, 7 U.S.C. §§1-25 against Defendants Alan James Watson, Michael Potts and Cash Flow Financial, LLC (“Defendants”) entitled  Commodity Futures Trading Commission v. Alan James Watson, et al., (Case No.: 11-cv-10949, in the United States District Court for the Eastern District of Michigan, the Honorable Lawrence P. Zatkoff presiding). (See Complaint.) The complaint alleges that from at least November 2007 through the initiation of the suit, Defendants fraudulently solicited and accepted at least $45 million from more than 600 individuals and entities to participate in a commodity pool to trade commodity futures contracts and securities. The CFTC is seeking civil monetary penalties and other equitable relief, including restitution to pool participants.

On March 11, 2011, the Court entered a Statutory Restraining Order (the “SRO”) which, among other things prohibits the Defendants from transferring their assets and appoints Phillip S. Stenger as temporary Receiver. (See SRO) As Receiver, Mr. Stenger is directed and authorized by the court to assume full control of all assets of the Defendants and to otherwise manage and administer the assets of the Defendants.  The Receiver is currently in the process of investigating and pursuing any possible sources of recovery, including various unauthorized investments made by Watson in non-Trade LLC investments.  Further information regarding the assets recovered to date can be found in our most recent Letter to Investors, and the Receiver’s First Report to the Court.

In addition to the recovery of assets, the Receiver is also tasked with the responsibility of establishing a plan of distribution of CFF assets to investors.  You should have already received and completed an Investor Response Form which will provide the Receiver with your contact information and additional information regarding your claim. (Investor Response Form).  If you have not yet completed and returned this form, please do so as soon as possible.  The Receiver is in the process of reviewing these forms and various other CFF records in order to recommend the appropriate claims procedure to the court.  Once the court has approved the claims procedure, we will be able to provide a distribution date to investors.

In addition, please note that on September 2, 2011, the United States Attorney’s Office filed a criminal case against Alan J. Watson in the United States District Court for the Eastern District of Virginia.  For additional information regarding the criminal matter, please see the “Frequently Asked Questions” section of this website.

If you have any questions, please feel free to contact this office.

The Receiver’s contact information is as follows:

Phillip S. Stenger, Esq.
Stenger & Stenger, PC
4095 Embassy SE
Grand Rapids, MI 49546
Toll Free: (877) 512-2483
Telephone: (616) 264-3256
Fax: (616) 940-1192
Email

Investor Response Form | Pleadings | Letters to Investors | Court Reports | Frequently Asked Questions | Contact Us