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Federal Court Freezes Assets of Texas Trading Firm M25 Investments Charged by the CFTC with an $8 Million Forex Fraud

by Michael Greenberg
    Federal Court Freezes Assets of Texas Trading Firm M25 Investments Charged by the CFTC with an $8 Million Forex Fraud
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    Court appoints a receiver to indentify assets and funds owed customers

    Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC ) today announced it obtained an emergency court order freezing assets held by defendants M25 Investments, Inc., M37 Investments, LLC, Scott P. Kear, Sr., Jeffrey L. Lyon, all of Waxahachie, Tex., and David G. Seaman, of Arlington, Tex. The court’s order also prohibits the destruction of records and appoints a receiver to identify assets, customers and amounts owed customers.

    The court’s order stems from a CFTC anti-fraud enforcement action filed on September 29, 2009, in the U.S. District Court in Dallas, charging the defendants with fraudulently soliciting at least $8 million from approximately 224 customers in connection with the trading of foreign currency (Forex ), forex options and commodity futures contracts. The defendants ran their alleged scheme out of their offices in Texas, West Virginia and Mississippi. Many of the defendants’ customers were elderly and knew each other through churches in West Virginia, Mississippi, Texas, Maryland and other states, according to the CFTC complaint.

    The CFTC complaint further alleges that defendants fraudulently guaranteed monthly returns of 2 percent and annual returns of 24 percent and falsely claimed to be successful forex traders. Defendants did not disclose to prospective and existing customers that a significant portion of their funds would not be used for trading. The defendants also did not disclose that as of at least March 31, 2009, they did not have sufficient assets to pay the promised monthly profits or return principal.

    Court appoints a receiver to indentify assets and funds owed customers

    Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC ) today announced it obtained an emergency court order freezing assets held by defendants M25 Investments, Inc., M37 Investments, LLC, Scott P. Kear, Sr., Jeffrey L. Lyon, all of Waxahachie, Tex., and David G. Seaman, of Arlington, Tex. The court’s order also prohibits the destruction of records and appoints a receiver to identify assets, customers and amounts owed customers.

    The court’s order stems from a CFTC anti-fraud enforcement action filed on September 29, 2009, in the U.S. District Court in Dallas, charging the defendants with fraudulently soliciting at least $8 million from approximately 224 customers in connection with the trading of foreign currency (Forex ), forex options and commodity futures contracts. The defendants ran their alleged scheme out of their offices in Texas, West Virginia and Mississippi. Many of the defendants’ customers were elderly and knew each other through churches in West Virginia, Mississippi, Texas, Maryland and other states, according to the CFTC complaint.

    The CFTC complaint further alleges that defendants fraudulently guaranteed monthly returns of 2 percent and annual returns of 24 percent and falsely claimed to be successful forex traders. Defendants did not disclose to prospective and existing customers that a significant portion of their funds would not be used for trading. The defendants also did not disclose that as of at least March 31, 2009, they did not have sufficient assets to pay the promised monthly profits or return principal.

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