CFTC Charges Boston Fraudster for Running Un-regulated Forex Pool

The U.S. Commodity Futures Trading Commission (CFTC) announced that on May 3, 2013, the U.S. District Court for the Eastern District of Wisconsin issued an Order freezing the assets of Defendant David Prescott, individually and doing business as Cambridge Currency Partners (Prescott). The court’s Order also prohibits the destruction of books and records and sets a telephonic status hearing for May 15, 2013.

The court’s Order stems from a CFTC civil Complaint filed on April 30, 2013, charging Prescott with fraudulently soliciting individuals to invest in Cambridge’s off-exchange foreign currency (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) pool and then misappropriating their monies. According to the Complaint, from at least June 2010 to the present, Prescott misappropriated at least $455,000 of pool participants’ monies, using some of those funds for air travel, hotel accommodations, and gambling. The Complaint also alleges that Prescott defrauded pool participants and prospective pool participants by misrepresenting the risks involved in forex trading and executing demand promissory notes in their favor that promised the repayment of the note amount and monthly interest Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, knowing or recklessly disregarding that he could not make those payments by his forex trading.

Additionally, the Complaint alleges that Prescott failed to inform participants and prospective participants that under the name of David Weeks, he previously had been convicted of conspiracy to commit securities fraud, mail fraud and wire fraud, and perjury, and had been ordered to pay restitution of over $1 million to defrauded investors and was permanently enjoined from violating the anti-fraud provisions of the Securities Exchange Act.

The Complaint also charges Prescott with engaging in the alleged misconduct without the benefit of registration as a Commodity Pool Operator.

In the continuing litigation, the CFTC is seeking repayment of pool participants’ losses, repayment of funds received by the Defendant, civil monetary penalties, and permanent injunctions prohibiting the Defendant from violating the federal commodity laws and from engaging in further trading