The US Commodity Futures Trading Commission (CFTC) has announced that the perpetrator of a social media forex scheme is going to have to pay a hefty fine and compensate over 400 victims. Kelvin Ramirez duped his victims using Instagram and WhatsApp, convincing them to invest with him over $735,000 in total.
While he paraded to be enjoying a lavish lifestyle thanks to his earnings from trading foreign exchange, in reality, he never had any accounts opened with any brokerage.
The court found that Ramirez fraudulently solicited and misappropriated funds from clients in the forex trading scheme. Aside from reimbursing his victims, Ramirez will have to pay a civil monetary penalty totaling $2.2 million. He is also barred from registering with the CFTC and trading in any CFTC-regulated markets.
Ramirez is also permanently banned from engaging in conduct that violates the US Commodity Exchange Act.
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Managed Accounts and Signals
According to the court’s decision, Ramirez fraudulently solicited more than 400 clients to invest in commodity pools that purportedly traded in forex. The defendant allegedly managed numerous accounts, and the clients were subscribed to his forex trading education and signals services.
After misappropriating funds provided to him for trading purposes, Ramirez started boasting his lifestyle on social media using platforms like Instagram and WhatsApp, among others. He claimed to be making hundreds of thousands of dollars weekly while trading on the forex market.
He also claimed to have a multi-million dollar personal bank balance and a managed forex trading pool with millions of dollars in assets under management. The court found that all of these representations were false and that the defendant defrauded his clients of just over $735,000.
“The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable,” the US regulator outlined in a statement.
While no trading has been done, the CFTC is acknowledging the assistance of the St. Vincent and the Grenadines Financial Services Authority.