Florida resident Brett G. Hartshorn, who purportedly operated a fraudulent foreign-exchange scheme, was hit with criminal charges for allegedly collecting money from several unsuspecting investors and spending it on a lavish lifestyle.
The U.S. Commodity Futures Trading Commission (CFTC) today filed a lawsuit against Hartshorn, charging him with operating a fraudulent scheme that offered forex transactions.
Specifically, the U.S. derivatives regulator alleged in its complaint that from June 18, 2008 to in or around 2014, Hartshorn engaged in a fraudulent scheme that netted nearly $906,000 from at least 13 retail clients.
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In connection with the promotion of his pool, Hartshorn made a series of materially false claims to lure investors interested in forex trading. The claim was made that pool participants could get extraordinary investment returns. While he was actually running risky trading strategies, Brett also claimed that he had profitably traded forex on behalf of himself and others. In addition, Hartshorn did not disclose to clients that he will charge his clients some fees, even if losses accumulated in their accounts.
In a parallel criminal action, in some cases instead of using the investors’ monies in trading, the fraudster misappropriated at least $57,414 which was largely spent on personal expenses.
As a result of the actions, the commission seeks full restitution to defrauded participants, disgorgement of any ill-gotten gains and a civil monetary penalty. In addition to the fiscal penalties, the CFTC seeks “permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws,” as charged.
Finally, the CFTC warned victims that although it works closely with authorities to seek prompt return of all misappropriated funds, wherever situated, they may not recover their lost money because the wrongdoers may not have sufficient funds or assets.
The Commission also said it has collaborated with several regulators from various jurisdictions. The CFTC has therefore thanked the Federal Bureau of Investigation (Sarasota, Florida) and the U.K. Financial Conduct Authority for their assistance.