November 19, 2013
Federal Court Sanctions David Prescott for Forex Pool Fraud
Prescott Ordered to Pay Restitution and a Civil Monetary Penalty Totaling More than $1.8 Million
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained $455,098 in restitution for defrauded off-exchange foreign currency (forex) customers and a $1,365,294 civil monetary penalty in a federal court default judgment Order against Defendant David Prescott, individually and doing business as Cambridge Currency Partners (Cambridge). The court’s Order stems from a CFTC civil Complaint filed on April 30, 2013, charging Prescott with fraudulently soliciting individuals to invest in Cambridge’s forex pool and then misappropriating their monies (see CFTC Press Release 6581-13).
The Order, entered by the Honorable Charles N. Clevert, Jr. of the U.S. District Court for the Eastern District of Wisconsin on October 31, 2013, requires Prescott to pay the restitution and civil monetary penalties, and permanently bars Prescott from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.
Specifically, the Order finds that, from at least June 2010 through April 2013, Prescott fraudulently solicited individuals to invest in Cambridge’s off-exchange forex pool and misappropriated $455,098 of pool participants’ monies, using some of those funds for air travel, hotel accommodations, and gambling. According to the Order, Prescott defrauded pool participants and prospective pool participants by misrepresenting the risks involved in forex trading and executing demand promissory notes in their favor that promised the repayment of the note amount and monthly interest payments, knowing or recklessly disregarding that he could not make those payments by his forex trading.
The Order also finds that Prescott failed to inform participants and prospective participants that, under the name of David Weeks, he previously had been convicted of conspiracy to commit securities fraud, mail fraud and wire fraud, and perjury, had been ordered to pay restitution of over $1 million to defrauded investors, and was permanently enjoined from violating the anti-fraud provisions of the Securities Exchange Act.
CFTC Division of Enforcement staff members responsible for this case are Diane M. Romaniuk, Ava M. Gould, Mary Beth Spear, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
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