SEC Charges Massachusetts-Based Forex Traders and Their Firm With Fraud
I’ve asked for Craig Karlis’s reply to that, hoping he’ll respond soon.
Washington, D.C., Oct. 28, 2010 — The Securities and Exchange Commission today charged two foreign currency traders and their Boston-based company with operating a fraudulent scheme in which they sent investors misleading account statements while stealing their funds and incurring major trading losses.
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The SEC alleges that Craig Karlis of Hopkinton, Mass., and Ahmet Devrim Akyil formerly of Hingham, Mass., fraudulently raised approximately $40 million from approximately 750 investors in a purported foreign currency (Forex) trading venture through their firm Boston Trading and Research LLC (BTR). Investors were falsely promised that BTR had a system in place to limit trading losses. BTR also falsely claimed to investors that “we do not profit unless you do” while in reality Karlis and Akyil were illegally diverting investor money for their own personal use as well as to fund BTR’s operations and pay expenses for other companies with which they were associated.
“The bait was the promise by Akyil and Karlis to limit investor risk, and the switch was the theft and unauthorized trading that cost investors 90 percent of the invested funds,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “If you don’t deliver what you promise and violate the securities laws, we will hold you accountable.”
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David Bergers, Director of the SEC’s Boston Regional Office, added, “Akyil and Karlis secretly enriched themselves while many of the defrauded investors lost their retirement savings and financial security.”
According to the SEC’s complaint filed in federal court in Boston, for a minimum investment of $10,000, investors could deposit money with the BTR program. BTR used a website, sales representatives and live presentations by Karlis and Akyil to solicit funds from investors around the world. Investors provided Akyil with a limited power of attorney that granted him the right to direct the trading of their funds in the Forex market.
The SEC alleges that BTR’s misrepresentations to investors included the following:
- Investors would have 100 percent transparency about what was going on in their accounts through daily and monthly account statements and 24-hour access to real-time information about the trading Akyil was doing on their behalf.
- Investors, through draw-down agreements, could lose no more than an agreed-upon percentage (typically 30 percent) of their investment.
- The BTR trading system included an automatic stop-loss program that would curtail losses once they reached a certain percentage.
- BTR and its principals would be paid from profits only.
The rest here and full complaint is embedded below.
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SEC Charges Massachusetts-Based Forex Traders and Their Firm With Fraud
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The SEC document says there are 3 owners. Who is the third owner?
It states on page 4, item 11. “Karlis was BTR’s managing director and one of its three owners”
The third owner was George Popescu…..of Boston Technologies. Not surprising that his bio at the Boston Technologies website does not mention Boston Trading Research. It is said that George Popescu was the partner in charge of IT.
So knowing the stand-up kind of a guy that Karlis is, and that Devrim is in Turkey, how long before Karlis starts ratting out his old partner, George Popescu? Let the fat man sing.
I know for a fact that the SEC requested(ordered) tons of documents from Boston Technologies no more than 2 weeks ago. I have first hand knowledge of this. They asked for ALL ACCOUNT OPENING DOCUMENTS.
This does not bode well for them. I suspect Mr. Popescu (and maybe others) will be implicated soon.
it is interesting that the sec is bringing up the allegation and not the cftc. also, it appears to me that the federal regulators are aiming to catch a big fish, and that can cause ripples throughout the industry as they are all interlinked.
anyone ever read den of theives?
I worked for this firm back in 2007 without knowing the FX industry. The managers told us that investors could not lose more than 30% of their investment because the trader always used risk management tools such as stops orders, trailing stops and hedging strategies. Everything seemed real, we believed in the product and everyone assumed top management were good people. They even encouraged their own employees to put their own money with the firm. Unfortunately, I invested too. The worst part was not losing my job or my savings. It was facing the clients/relatives/acquaintances without really knowing what happened.… Read more »
Hi all, I can confirm that I was involved in BTR as CTO ( Chief Technology officer) and that, as was the case with all the other employees, I was interviewed by the SEC, CFTC and District Attorney about the BTR case. As you can see in the documents , neither myself or any other employee are cited anywhere and I think this should say enough about our role. Now regarding the relationship of BTR and BT : BTR was one of the first customers of Boston Technologies and just a customer. As you all know BT services brokers in… Read more »
Baahhhhhhhh, Karlis. He has left a path of ruined accounts and ripped off employees and clients.
Enjoy your new country club residence, I doubt it is the same as Hopkinton Country Club.