It is nearly a year after the Commodities Futures Trading Commission (CFTC) action against Revelation Forex Fund and its proprietor Kevin White in connection with financial market fraud. The fraud resulted in a guilty conviction and a term of 97 months in federal prison related to criminal charges of mail fraud, along with a $3,365,888 restitution order and a $4,150,000 civil monetary penalty, and today, another person has been implicated.
The CFTC today announced charges against Brian Hinman for aiding and abetting White and White’s entities, including KGW Capital Management, LLC, and Revelation Forex Fund (RFF), as well as a settlement helping to bring an end to this ongoing story.
The connection cited a fraudulent mass solicitation email that Hinman helped send to some of the investors of White’s entities involved in the Ponzi scheme and follows a multi-year investigation after the CFTC made its initial charges against White and his entities in 2013.
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Fraudulent Email Solicitation
The CFTC simultaneously settled the newly-revealed charges by requiring Hinman to pay a monetary fine of $140,000 and disgorge $1,138.12 in commissions that he had been paid for the apparently very costly emails, in addition to being permanently banned from registering with the CFTC and from any related commodities activities.
The period that Hinman was said to have been involved in the mass emails was only a month, between July and August 2011, according to the CFTC.
As the number of such forex scams in the U.S. continues to rise, despite the dwindling consolidation in the regulated retail forex space, either via exempted or regulated Commodity Pool Operators (CPOs) or unregulated firms, the CFTC is apparently trying to hamper any potential future violators by sending a message that even those who engage in email solicitations – such as marketing firms and freelancers – must be held responsible.
The CFTC noted appreciation towards the U.S. Securities and Exchange Commission (SEC) regional office in Fort Worth, Texas, which assisted in the investigation.