Court orders Shawon McClung to pay over $6 million for running a forex ponzi scheme
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 Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term (see CFTC New Release 6063-11, June 30, 2011).
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.
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 Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term (see CFTC New Release 6063-11, June 30, 2011).
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.