SEC Charges Former Hedge Fund Managing Director with Fraud

The Securities and Exchange Commission (SEC) has made an announcement regarding resolved fraud charges against Chad Stickforth, the former managing director of RSF Capital, LP. These charges are linked to the alleged misuse and misappropriation of millions of dollars raised from investors.

According to the SEC’s complaint, which was filed in a federal district court in Colorado, Chad Stickforth, operating through RSF Capital, collected approximately $5.4 million from twenty investors between December 2016 and September 2021. He reportedly assured these investors that their funds would be utilized for trading futures contracts, commodity interests, and options on their behalf. However, the complaint contends that Stickforth only allocated a small portion of the investors’ capital for trading activities. Instead, he allegedly misused the majority of the investors’ money for personal expenses, payments to a business partner, and made payments to investors in a manner resembling a Ponzi scheme, in order to maintain the illusion of profitable trading.

Chad Stickforth, without admitting or denying the SEC’s allegations, has consented to a final judgment. This judgment would permanently prohibit him from violating the anti-fraud provisions established in Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. Furthermore, it would enforce a permanent officer-and-director bar and mandate the payment of $1,546,197 in disgorgement, prejudgment interest, along with a civil penalty of $223,229. It is important to note that this settlement is pending court approval.

The investigation by the SEC was carried out by John Dwyer, Yamini Piplani Grema, and Daniel Konosky, with the assistance of Terry Miller and Gregory Kasper. Supervision was provided by Danielle R. Voorhees, Nicholas P. Heinke, and Jason J. Burt, all from the SEC’s Denver Regional Office.