Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the District of Colorado entered an order against defendants Flint-McClung Capital LLC (FMC), of Englewood, Colo., and Shawon McClung, formerly of Denver, Colo., requiring them jointly and severally to pay restitution of $1,701,250 and a $4.3 million civil monetary penalty. The order also imposes permanent trading and registration bans against the defendants.
The court’s order of default judgment and permanent injunction stems from a June 2011 CFTC enforcement action that charged FMC and McClung with fraud and misappropriation in an off-exchange foreign currency (forex) Ponzi scheme (see CFTC New Release 6063-11, June 30, 2011).
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The order finds that, beginning in or about March 2010, the defendants fraudulently solicited and received at least $2.4 million from 20 customers by touting their success in trading forex. In their solicitations, McClung and FMC, through McClung and others, falsely represented that FMC had approximately $300 million in pool participant funds, which were segregated and in reserve, and used approximately $500 million in FMC proprietary funds to trade forex. However, according to the order, the defendants engaged in little, if any, trading on behalf of pool participants.