North Carolina Foreign Currency Firm And Its Principal Charged With Operating $1.3 Million Forex Ponzi Scam
.jpg)
The U.S. Commodity Futures Trading Commission (“CFTC”) today charged CapitalStreet Financial LLC (“CSF”) and its principal, both of Charlotte, N.C., with operating a Ponzi scheme involving the fraudulent solicitation of at least $1.3 million from at least 69 customers in connection with foreign currency (“forex”) trading. The defendants also were charged with misappropriating approximately $875,000 of customer funds.
Specifically, the CFTC complaint charged that, since at least September 2006 through the present, the defendants fraudulently operated a forex trading scheme, luring customers to trade managed or pooled forex accounts by claiming forex trading success and promising quick and large returns, such as 60 percent to 80 percent annually. According to the CFTC, the defendants created the false impression that CSF was a well-established forex firm, in operation since 1999 with more than 35 offices in New York and North Carolina. In reality, the CFTC asserted, the defendants were not successful forex traders, sustained about $275,000 in trading losses, and opened CSF in or around August 2006 with four offices in the Charlotte area. The defendants allegedly provided customers with false monthly statements to conceal trading losses and their misuse of customer funds.
The CFTC contended that the defendants allegedly used the misappropriated customer funds to pay purported profits to customers as in a Ponzi scheme and for their personal use.
Also today in a related action, the Securities Division of the Office of the North Carolina Secretary of State arrested the CSF principal and executed search warrants at CSF and his home.
In its continuing litigation, the CFTC seeks restitution, disgorgement of any ill-gotten gains, civil monetary penalties and permanent trading bans.
Delicious
Digg
Reddit
Facebook
Google
