In May 2021, the SEC and CFTC commenced parallel civil enforcement actions in the U.S. District Court for the Northern District of Illinois (Court) against two investment advisers; their founder and principal; and their co-portfolio manager (collectively, Defendants). The funds managed by the advisers, which followed a short options strategy, lost most of their value and collapsed in early 2018 during an abrupt market gain and increase in volatility. The agencies alleged that the Defendants defrauded investors by making material misrepresentations about the worst-case loss scenarios of their investment strategies and maintaining a consistent risk level within their portfolios. On June 30, 2025, after the Court denied the parties’ cross-motions for summary judgment, the Defendants settled both actions, agreeing to pay more than $6 million in sanctions. This article details the background of the enforcement actions and the final judgments against the Defendants. See “High‑Profile Risk Management Misrepresentation Could Personally Cost Portfolio Manager $13.6 Million” (May 26, 2022).