The US Commodity Futures Trading Commission (CFTC) has filed civil enforcement charges, among others, against Melody Nganthuy Phan and her three companies for a fraudulent foreign exchange scheme valued at over $3.7 million, according to an official CFTC statement.
The depth of the deceit spans over three separate companies under Phan’s control, including My Forex Planet Inc., Wal Capital S.A. and Top Global Capital Inc.(TGC). In addition to the charges of forex fraud, Phan was also charged with violations via an unregistered commodity pool operator. Indeed, the large-scale infractions mainly focused on the misappropriation of funds from 174 customers, who collectively were hoodwinked out of at least $3,764,214, citing the CFTC statement.
Forex Trading Scheme Dupes over 174 Clients Using Faulty Credentials
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The report states that between a period from at least January 2009 to February 2011, Phan and her trifecta of fraudulent entities engaged in the procurement of funds via forex training classes, which were then used to trade forex at TGC. This was accompanied by the falsification of records and credentials, stating incorrectly that Phan was a self-made millionaire who had been very successful at forex trading, while also embellishing the integrity and prospective returns of her system, as taught by My Forex Planet. Finally, Phan was also charged for soliciting funds of clients without their intended purpose, namely for her own trading use – to which she lost a sum of $1.4 million of client money across multiple forex accounts.
Wave of Charges and Actions Lobbied Against Phan
Moreover, customer funds were illegally appropriated for such unauthorized purposes as withdrawal fees and the covering of numerous expenses across Phan’s multiple enterprises. In response to the charges, the CFTC aims to seek restitution, civil penalties and trading bans lobbied against Phan, in short, that she be barred from engaging in these practices ever again. Ultimately, the CFTC extended its thanks to the UK Financial Conduct Authority (FCA) which was instrumental in uncovering the forex scheme and bringing Phan to the US regulator’s attention.