The US Securities and Exchange Commission (SEC) has charged two men behind a fake day-trading firm with pocketing over $1.4 million in deposits from hundreds of defrauded investors worldwide.
December has been a busy month for the US regulator, which earlier this week charged Mark Nordlicht and his firm for engaging in another fraudulent scheme in which Nordlicht inflated asset values and illicitly moved investor money to cover losses and liquidity problems.
In its latest case, the SEC has alleged that Naris Chamroonrat of Thailand recruited US citizen Adam Plumer to help him lure investors to day-trade through an unregistered brokerage firm called Nonko Trading with promises of generous leverage, low trading commissions, and low minimum deposit requirements.
According to the SEC, rather than using a live securities trading platform, Nonko Trading provided certain investors with training accounts that merely simulated the placement and execution of trade orders. When these investors sent funds to Nonko Trading and proceeded to place trade orders, they were never actually routed to the markets.
When these investors sent funds to Nonko Trading they were never actually routed to the markets.
The SEC further alleges that investor money was instead used to fund Chamroonrat’s personal expenses, pay Plumer and other associates, and make Ponzi-like payments to investors who asked to close their accounts.
According to the SEC’s complaint, the scheme deliberately targeted investors who were inexperienced and more likely to place unprofitable trades, making them less likely to ask to withdraw funds from their accounts.
Joseph G. Sansone, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit, commented: “As alleged in our complaint, Chamroonrat defrauded investors in more than 30 countries by using a trading simulator to deceive them into believing they were involved in legitimate securities trading rather than victims of a $1.4 million fraud.”
The SEC is seeking injunctions and the repayment of fraudulent gains together with penalties. In a parallel action, the New Jersey District Attorney’s Office has announced criminal charges against Chamroonrat.