CFTC v. Watson (ponzi schemes, 2015)

Judgment entered

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In 2015 the CFTC announced final orders in a commodity pool Ponzi case, including $37,224,928.82 in restitution and a $27 million civil monetary penalty on Alan Watson, and the same penalty on his company Cash Flow Financial; Michael Potts was separately ordered to pay a $558,542.61 penalty and disgorge $186,180.87.

The record

What was ordered

Civil penalty

$27m

Disgorgement

—

Prejudgment interest

—

Total relief

$27m

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The complaint of March 2011 charged Watson, Cash Flow Financial and Potts with taking at least $45 million from more than 600 pool investors and misappropriating most of it. Watson pleaded guilty to wire fraud in a related criminal case and received 12 years.

The $186,181 disgorgement the record showed belongs to Potts, not to Watson, and the defendant list had named only Watson.

This library tags the matter as ponzi schemes because the order or release describes payments to earlier participants made from later participants' money. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Ponzi schemes — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2015-10-20 CFTC release published

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• CFTC release

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.