The U.S. Commodity Futures Trading Commission announced Thursday that it has filed charges against a New Jersey-based commodity pool operator for allegedly fraudulently soliciting more than $400,000 from investors to trade in foreign currency.
According to the complaint, Michael S. Wright and his company, Global FX Club, fraudulently solicited the money from several unsuspecting investors by guaranteeing pool participants a monthly return on their investments based on profits purportedly earned from forex trading.
Many of the victims sought higher monthly income on their retirement savings, but the CFTC alleges that the fund never traded or generated any income from trading forex, misappropriating most of the investors’ funds.
“The CFTC Complaint also charges WTCG with failing to register with the CFTC as a commodity pool operator (CPO), as required, and engaging in activities prohibited for a CPO, including commingling pool funds with defendants’ funds,” the regulator added in its complaint.
eToro’s Dylan Holman on Introducing Bitcoin to the Premier LeagueGo to article >>
The CFTC alleges that beginning in August 2010 and continuing through to the present the defendants, including Wright as controlling person of WTCG, conspired to defraud investors by enticing them to participate in their fund.
To create the illusion of stability, the defendants allegedly prepared and distributed false account statements to fund participants, telling investors that the fund offered a safe investment with steady and guaranteed returns, according to the complaint.
As a result, at least 10 pool participants gave the defendants a total of $400,000 to trade in their purported forex pool.
The CFTC has asked the court to provide full restitution to defrauded pool participants, disgorgement of ill-gotten gains and to pay the appropriate civil monetary penalties. In addition to fiscal claims, the agency seeks permanent registration and trading bans and a permanent injunction from future violations of federal commodities laws.