The CFTC has begun the New Year with a string of new actions, including the latest complaint upheld by a federal court that requires defendant Mark E. Rice from Sugarland, Texas to pay $827,000 in restitution and $673,000 in civil penalties in order to settle CFTC charges related to forex fraud.
The charges were in connection with alleged fraudulent activities involving foreign exchange currency contracts, including misappropriation of customer funds to trade leveraged otc forex, and fraudulent solicitation by Mark E. Rice of Financial Robotics Inc., according to the CFTC press release.
The permanent injunction as part of a Consent order stemming from a CFTC complaint filed in 2011 against Rice, and Rice’s company Financial Robotics Inc. (FinRob), entered on January 13th, 2014, by Judge Lee H. Rosenthal in the US District Court for the Southern District of Texas imposes a permanent trading and registration ban against Rice and prohibits him from violating provisions of the CEA, as charged, along with the total $1.5 million in sanctions handed down to Rice.
Judge Rosenthal also presided over the 2011 injunction when the CFTC moved in swiftly to protect the books and freeze assets of Financial Robotics Inc. and Rice. The press release by the CFTC today stated its litigation with Financial Robotics Inc. as ongoing.
Followed 2011 Injunction by CFTC to freeze Financial Robotics Assets
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According to the order, from June 2008, Rice operated a fraudulent scheme that solicited approximately $1.7 million from one individual to trade leveraged off-exchange forex contracts, and described how Rice falsely told his customer, among other things, that his investment was “risk free” and insured against loss, and that the return of his principal was guaranteed.
The Order further finds that Rice misappropriated at least $576,000 of his customer’s funds by transferring the money to unrelated Rice-controlled companies and, thereafter, spending at least $404,000 of those funds for Rice’s personal and business expenses.
During the 2011 injunction, the CFTC thanked the National Futures Association (NFA), the British Virgin Islands (BVI) Financial Services Commission (FSC), The Netherlands Authority for the Financial Markets (AFM), and the United Kingdom’s Financial Conduct Authority (FCA) for their assistance.
In the announcement today of the Texas federal court ruling, the CFTC noted that its Division of Enforcement (DOE) staff members responsible for this case were Kevin S. Webb, Michelle S. Bougas, James H. Holl, III, and acting Director of Enforcement, Gretchen L. Lowe.