An announcement made by the U.S. Commodity Futures Trading Commission (CFTC) revealed a civil enforcement complaint, charging Defendants, Allied Markets LLC and the company’s principals Joshua Gilliland and Chawalit Wongkhiao, with operating a fraudulent forex commodity pool violating the Commodity Exchange Act (CEA) and CFTC Regulations.
Allied Markets LLC was not registered with the U.S. CFTC when from January 2012 it began to solicit over $1 million from members of the public to trade forex in a commodity pool.
What happened afterwards is a familiar story – the alleged perpetrators Gilliland and Wongkhiao misappropriated a huge portion of the funds to pay for their own personal expenses. About $64,000 were allegedly spent on entertainment, $33,000 on travel expenses, $66,000 on renting a lavish residence in Jacksonville Beach, Florida, while $139,000 was withdrawn in cash and $82,000 went to the duo’s personal bank accounts.
The Defendants allegedly used funds which were collected from the participants of the commodity pool, to disburse “trading profits” and supposedly returned pool participants’ principal, essentially operating as a Ponzi scheme.
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Specifically, according to the Complaint, the Defendants solicited members of the public to send them money for forex trading by fraudulently guaranteeing specific trading returns and by making material misrepresentations regarding their trading expertise and results, including that the Defendants’ forex trading was generating large profits.
A U.S. District Judge has ordered the freezing and preserving of the assets of Allied Markets LLC, with a hearing scheduled for January 21, 2015, on the CFTC’s motion for a preliminary injunction.
The CFTC complaint seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of the CEA and CFTC Regulations, as charged.