Court Fines Mark Pyatt $255K for Operating FX Fraud Scheme

A North Carolina judge has granted the CFTC’s motion for a default judgment against a Haywood County resident, who operated a Ponzi-like scheme that conned victims out of thousands of dollars.

According to court documents, Winston Reed Investments LLC (WRI) and its Vice President and Investment Consultant, Mark Nicholas Pyatt solicited victims to invest in Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term trading and commodity futures pools.

Court records say that beginning in April 2017 and continuing through February 2019, Pyatt and his investment fund scammed at least 19 customers and pocketed more than $200,000.

Pyatt, who also used the alias Daniel G. Randolph, was sentenced to 37 months in prison for the scheme that solicited friends and acquaintances to invest money in a fund held by his company. Additionally, he will serve three years under court supervision after his release and was ordered to yield $275,000 to his victims as restitution.

During a substantial portion of the scheme, the unregulated money manager claimed he was a successful foreign exchange trader, when in fact he had lost money on his own personal trades.

Pyatt Used Stated Experience to Lure Victims

The Haywood County man falsely told his customers, among other things, that his company offers a safe investment with steady returns and called them to experience the same wealth he enjoyed. But, the agency alleges that the pool never generated any income from trading forex, as in reality, Pyatt lost nearly all of the pool participants’ funds.

The complaint further alleges that despite incurring overall net trading losses, WRI and Pyatt touted their expertise and sent customers fabricated account statements showing large profits of between 19 and 86 percent per month. To cover up his fraud, Pyatt initially claimed he made such substantial returns from his trading and later claimed that all money was lost after the broker-dealer handling his trades did not follow his instructions.

Moreover, the regulators found that the company accepted clients’ trades and funds and therefore acted as Eligible Contract Participants (ECPs), without registering as such with the CFTC.

Furthermore, the CFTC said that Pyatt did not use investors’ money for trading activities, but spent over $150,000 on unrelated personal purchases, such as jewelry, groceries, cigars and a Chevrolet Corvette.

For his crimes, Pyatt was required to pay more than $255,000 in fines and full restitution of what he had done. Finally, the CFTC warned victims that although it works closely with authorities to seek the prompt return of all misappropriated funds, wherever situated, they may not recover ‎their lost money because the wrongdoers may not have sufficient funds ‎or assets.‎