The United States government continues to purge the country of perpetrators of fraudulent FX schemes, today having cited three individuals and their associated firms for foreign exchange fraud and misappropriation of customer funds.
The Commodity Futures Trading Commission today confirmed that it has obtained a consent order from the US District Court for the Northern District of Georgia to issue Louis J. Giddens Jr, Anthony W. Dutton and Michael Gomez with a series of penalties amounting to over $400,000.
Within the terms of the order, Mr. Giddens of Fayetteville, Georgia, is required to pay restitution to investors of $29,759.49 and a civil monetary penalty of $100,000, Mr. Dutton, of Peachtree City, Georgia, has been issued with a restitution order for $56,604.35 and a $100,000 civil monetary penalty, and Mr. Gomez of Valrico, Florida has been ordered to pay $68,000 in restitution, in addition to a $75,000 civil monetary penalty.
Excessively Optimistic Projected Returns
In addition to the fiscal penalties, the court’s Order also imposes permanent trading and registration bans against all parties involved, and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act.
Why Ethereum Needs Layer 2 Solutions More Than EverGo to article >>
The Order, which was entered on October 2, 2013, by U.S. District Judge William S. Duffey, Jr., stems from a CFTC anti-fraud Complaint filed against the Defendants on June 23, 2011.
In issuing the order, the CFTC found that from a period between January and October 2010, Mr. Giddens and Mr. Dutton operated companies under the name of Currency Management Group, LLC and Pinnacle Capital Partners, LLC, respectively, and solicited and accepted funds to trade off-exchange foreign currency contracts from friends and co-workers.
Mr. Giddens and Mr. Dutton then transferred the solicited funds to another entity which they owned and operated named Pinnacle Trade Group, LLC (Pinnacle Trade) to trade FX, according to the court’s order.Funds transferred to Pinnacle Trade were either sent to FX trading accounts or to a bank account controlled by Mr. Gomez to trade investor funds. However, the Order finds that not all of investor money was traded in FX, but rather, some funds were retained by Mr. Gomez and Mr. Dutton.
The Order also finds that the parties concerned made statements on websites guaranteeing monthly returns of either five or ten percent from trading FX and that the websites did not disclose any risks associated with trading FX or that past performance does not guarantee future results.
In addition to promising to pay investors fixed returns, the court’s order finds that Mr. Giddens and Mr. Dutton executed promissory notes that promised to repay investors their principal sum, plus monthly interest of either five or ten percent and prepared online account statements that showed the current net balance of the promissory notes. The notes did not disclose any risk associated with forex trading.