Puerto Rico is not a region synonymous with FX trading, nor with regulatory matters. Although not part of the federal union of the United States, it does come under US Federal Law and is classified as an unincorporated territory of the United States, therefore making any misconduct with regard to FX committed within the country very much the business of the US Commodity Futures Trading Commission (CFTC).
Today, the CFTC has announced that it obtained a federal court consent order requiring defendants Angel F. Collazo, formerly of Salinas, Puerto Rico, and his companies, ACJ Capital, Inc. (ACJ) and Solid View Capital LLC (Solid View), both of San Juan, Puerto Rico, jointly and severally to pay $843,444 in restitution and to pay a $750,000 civil monetary penalty for fraudulently soliciting customers to participate in an off-exchange leveraged foreign currency (forex) pool, misappropriating pool participant funds, and issuing false statements to conceal trading losses and misappropriation.
The CFTC also obtained a second federal court consent order, requiring defendants Fernando Clemente, of Weston, Florida, and his company, Felgi Investments Corp. (Felgi) of Caguas, Puerto Rico, to pay $30,000 in restitution, to disgorge $120,933 in pool participant funds to which they were not legitimately entitled, and to pay a $120,000 civil monetary penalty.
The Orders also impose permanent trading and registration bans against all defendants and prohibit them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
FXTM Appoints Marcelo Spina as Global Head of PartnershipsGo to article >>
The orders, entered by Judge Jose A. Fuste of the U.S. District Court for the District of Puerto Rico on February 13, 2013 and June 10, 2013, respectively, stem from a CFTC complaint originally filed in February of 2012 (see CFTC Press Release 6180-12, February 15, 2012). In July 2012, the CFTC complaint was amended to include defendants Clemente and Felgi. Clemente and Felgi were also named as relief defendants for receiving funds from ACJ, Solid View, and Collazo to which they were not legitimately entitled.
The February 13, 2013 Order finds that Collazo and his companies fraudulently solicited commodity pool participants by falsely claiming profitable returns, while minimizing and failing to fully disclose the risks of trading leveraged forex. The Order also finds that Collazo, ACJ, and Solid View misappropriated pool funds to make payments to pool participants and for personal uses, failed to disclose their intended uses of pool participant funds, misrepresented the profitability of pool trading accounts, and distributed statements to ACJ and Solid View pool participants that contained false account values, including showing consistent trading profits.
The June 10, 2013 Order finds that Mssrs. Clemente and Felgi, misappropriated $30,000 in customer funds that were to have been provided by Felgi to Solid View for personal uses and failed to disclose their intended uses of pool participant funds. The Order also finds that Clemente and Felgi retained $120,933 in purported trading profits to which they were not entitled.
The CFTC appreciates the assistance of the U.S. Attorney’s Office of the District of Puerto Rico in this matter.
CFTC Division of Enforcement staff members responsible for this case are Kara Mucha, James A. Garcia, Michael Solinsky, Gretchen L. Lowe, and Vincent A. McGonagle.