The US securities regulator, or the CFTC, has wielded its regulatory ax one more time and has ordered operators of ApuroFX, an alleged FX fraudster from South Korea, to pay more the $2.2 million over numerous violations of the Commodity Exchange Act.
A California court has granted the US Commodity Futures Trading Commission’s motion for a default judgment against “Jin Choi (Choi), a citizen of the Republic of South Korea with a last known residence in Los Angeles, California, as well as his companies Apuro Holdings Ltd (Apuro) d/b/a, ApuroFX, JCI Holdings USA (JCI), and d/b/a JCI Trading Group, LLC,” the agency said today.
The fine includes $1.2 million in restitution payment to the victims of the scam, as well as a similar amount of money in a civil financial penalty.
Although the fine seems quite heavy for an individual, the regulator notes that he had solicited more than $1.15 million from defrauded pool participants. In addition, the CFTC has imposed a ban on any type of trading for Jin Choi and has also issued a “cease and desist order” – standard procedure in such cases, which prevents the offender from committing the same offense twice.
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The scam solicited over $1.15 million from 14 investors
The CFTC accuses ApuroFX and its principle on a number of counts, including fraudulent misappropriation, fraudulent solicitations, and false statements. The latter refers to a raft of fake account statements which the offender made up to mislead investors about the status of their investments.
According to federal investigators, Jin Choi enticed traders to invest money into an FX trading pool, citing his miraculous capabilities of gaining profits on the currency market. In reality, however, the trading with the clients’ money was far from successful, and the bulk of investments were simply used to cover Choi’s personal expenses or to pay a number of investors so that the scam remains hidden.
“The Order finds that the defendants misappropriated all of the customer funds to support Choi’s lavish lifestyle and to return approximately $24,000 to certain customers as purported “profits” in the manner of a “Ponzi” scheme, all while falsely representing that they were profitably trading on customers’ behalf,” the statement further explains.