This is a look at Wall Street fraudsters via excerpts from various U.S. government web sites such as the SEC, FDIC, DOJ, FBI and CFTC.
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Showing posts with label FOREIGN CURRENCY TRADES. Show all posts
Showing posts with label FOREIGN CURRENCY TRADES. Show all posts
Monday, September 12, 2011
SEC FILES CIVIL INJUNCTION AGAINST INVESTMENT ADVISOR AND PRINCIPAL FOR MISREPRESENTATIONS REGARDING THE FOREX MARKET
Monday, July 18, 2011
THE CURRENCY TRADER WHO WASN’T
The following is an excerpt from the SEC website:
“Washington, D.C., July 15, 2011 – The Securities and Exchange Commission filed fraud charges Thursday against the CEO of a purported foreign currency trading firm, alleging he scammed hundreds of investors with false promises of high, fixed-rate returns while secretly using their money to fund his start-up alternative newspaper.
First Capital Savings & Loan Ltd. Chief Executive Jeffery A. Lowrance, who had fled to Peru and was arrested there earlier this year, was arraigned today on criminal fraud charges in a 2010 indictment filed by the United States Attorney’s Office for the Northern District of Illinois. In addition, the Commodity Futures Trading Commission filed fraud charges Thursday against Lowrance and First Capital.
The SEC alleges that Lowrance raised approximately $21 million from investors in at least 26 states, including California, Oregon, Illinois and Utah, by promising huge profits from a specialized foreign currency trading program. First Capital actually conducted little foreign currency trading, lost money on the little trading that it conducted, and never engaged in any profitable business operations. Lowrance targeted certain investors by purporting to share their Christian values and their limited-government political views. He solicited investors through, among other things, ads in his start-up newspaper USA Tomorrow, which he distributed at a September 2, 2008 political rally in Minneapolis, Minnesota.
“Lowrance ironically portrayed himself as a crusader against corruption in government, while he ripped off investors who put their trust in him,” said Marc Fagel, Director of the SEC’s San Francisco Regional Office.
According to the SEC’s complaint, filed in federal district court in San Jose, California, Lowrance and First Capital promised investors a “predictable monthly income,” with monthly returns up to 7.15 percent through foreign currency trading. Some investors were told their investments were guaranteed and were given bogus letters of credit. First Capital also published a spreadsheet purporting to show its multi-year history of profitable trades, but the trades were fictitious, the SEC alleged. Instead of engaging in foreign currency trading as claimed, the SEC said Lowrance and First Capital secretly diverted investor funds to pay fake returns to earlier investors, to pay Lowrance (despite his failure to earn a profit for the investors), and to fund his newspaper.
Lowrance’s scheme began to unravel in June 2008 and Lowrance and First Capital had lost all of the investors’ money by September 2008. Nevertheless, Lowrance solicited at least an additional $1 million from at least 36 investors between June 2008 and February 2009 by continuing to tout First Capital’s fictitious high returns, the SEC alleged.
The SEC’s lawsuit seeks court orders prohibiting the defendants from engaging in securities fraud and requiring them to disgorge their ill-gotten gains and pay financial penalties.”
Saturday, July 2, 2011
CFTC ORDERS FLORIDA MAN TO PAY $140,000 PENALTY FOR FOREIGN CURRENCY SCHEME
THE FOLLOWING IS AN EXCERPT FROM THE CFTC WEBSITE:
"CFTC Orders Mark Adrian of Florida to Pay $140,000 Civil Penalty in Fraudulent Foreign Currency Scheme
Adrian pleaded guilty to federal criminal wire fraud and faces sentencing on August 2, 2011.
Washington, DC ― The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against Mark Adrian of Delray Beach, Fla., for his role in issuing false statements to customers in a fraudulent foreign currency (forex) scheme. The CFTC order requires Adrian to pay a $140,000 civil monetary penalty and prohibits him from trading for or on behalf of any other person and applying for registration with the CFTC. Adrian is currently not registered with the CFTC.
The CFTC order finds that, from approximately 2005 through approximately August 2008, KJW Capital Management, LLC (KJW), where Adrian was an employee and member, solicited customers — directly and indirectly through brokers — to open managed accounts in which KJW would trade off-exchange forex on behalf of these customers. KJW used purported proprietary trading methodologies and obtained more than $18.4 million from at least 58 customers, according to the order. KJW traded forex in individual customer accounts at Avidus Trading, LLC (Avidus), where Adrian was also an employee and member, and where all of KJW’s customers were required to open and maintain forex trading accounts, according to the order.
Customers suffered significant forex trading losses, and, instead of informing customers of these losses, Adrian created false bank records and spreadsheets to hide the losses from customers, the order finds. For example, one of Avidus’ Dresdner Bank (Dresdner) account statements that Adrian falsified had the same font, color and account number as the actual Dresdner statement; however, the balances were vastly different, the order finds. The actual Dresdner balance totaled $181,000, whereas the Dresdner balance per Adrian was $2,488,000, according to the order.
The information contained in these false bank records and spreadsheets became the basis for numerous oral and written material misrepresentations and omissions made to customers, the order finds. By these misrepresentations and omissions, Adrian deceived customers into not withdrawing their funds, which resulted in customers suffering losses of at least $2.3 million, according to the order.
In a related criminal proceeding, the U.S. Attorney’s Office for the Northern District of Illinois filed an information against Adrian on September 13, 2010 (Case No. 1:10-cr-00754). Adrian pleaded guilty to wire fraud on October 26, 2010. Sentencing is scheduled for August 2, 2011.
The CFTC thanks the U.S. Attorney’s Office for the Northern District of Illinois, the Federal Bureau of Investigation and the U.K.’s Financial Services Authority for their assistance in this matter.
CFTC staff members responsible for this case are Charles Marvine, Rick Glaser and Richard Wagner."
"CFTC Orders Mark Adrian of Florida to Pay $140,000 Civil Penalty in Fraudulent Foreign Currency Scheme
Adrian pleaded guilty to federal criminal wire fraud and faces sentencing on August 2, 2011.
Washington, DC ― The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against Mark Adrian of Delray Beach, Fla., for his role in issuing false statements to customers in a fraudulent foreign currency (forex) scheme. The CFTC order requires Adrian to pay a $140,000 civil monetary penalty and prohibits him from trading for or on behalf of any other person and applying for registration with the CFTC. Adrian is currently not registered with the CFTC.
The CFTC order finds that, from approximately 2005 through approximately August 2008, KJW Capital Management, LLC (KJW), where Adrian was an employee and member, solicited customers — directly and indirectly through brokers — to open managed accounts in which KJW would trade off-exchange forex on behalf of these customers. KJW used purported proprietary trading methodologies and obtained more than $18.4 million from at least 58 customers, according to the order. KJW traded forex in individual customer accounts at Avidus Trading, LLC (Avidus), where Adrian was also an employee and member, and where all of KJW’s customers were required to open and maintain forex trading accounts, according to the order.
Customers suffered significant forex trading losses, and, instead of informing customers of these losses, Adrian created false bank records and spreadsheets to hide the losses from customers, the order finds. For example, one of Avidus’ Dresdner Bank (Dresdner) account statements that Adrian falsified had the same font, color and account number as the actual Dresdner statement; however, the balances were vastly different, the order finds. The actual Dresdner balance totaled $181,000, whereas the Dresdner balance per Adrian was $2,488,000, according to the order.
The information contained in these false bank records and spreadsheets became the basis for numerous oral and written material misrepresentations and omissions made to customers, the order finds. By these misrepresentations and omissions, Adrian deceived customers into not withdrawing their funds, which resulted in customers suffering losses of at least $2.3 million, according to the order.
In a related criminal proceeding, the U.S. Attorney’s Office for the Northern District of Illinois filed an information against Adrian on September 13, 2010 (Case No. 1:10-cr-00754). Adrian pleaded guilty to wire fraud on October 26, 2010. Sentencing is scheduled for August 2, 2011.
The CFTC thanks the U.S. Attorney’s Office for the Northern District of Illinois, the Federal Bureau of Investigation and the U.K.’s Financial Services Authority for their assistance in this matter.
CFTC staff members responsible for this case are Charles Marvine, Rick Glaser and Richard Wagner."
Labels:
CFTC,
FOREIGN CURRENCY TRADES,
FOREX,
FUTURES TRADES
Sunday, June 19, 2011
JUDGE ORDERS COMMODITY COMPANY MANAGEMENT TO PAY MILLIONS
Investing in foreign currencies might be a bit of a gamble especially if the people you are placing your money with are dishonest. The old adage “It’s all Greek to me,” might be something foreign currency investors should bear in mind. The following is an excerpt from the CFTC website:
“Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that the Honorable Judge John Antoon II of the U.S. District Court for the Middle District of Florida ordered Capital Blu Management, LLC (Capital Blu) of Melbourne, Fla., Donovan Davis Jr. of Palm Bay, Fla., Damien Bromfield of Ocoee, Fla., Blayne Davis of Naples, Fla., and DD International Holdings, LLC (DDIH) of Palm Bay, Fla., jointly and severally to pay restitution of $2,463,592.12. Judge Antoon ordered Bromfield and Blayne Davis each to pay a civil monetary penalty of $4,927,184.24 and ordered Donovan Davis Jr. and DDIH jointly and severally to pay a civil monetary penalty of the same amount.
The federal order, entered on June 9, 2011, also permanently bars all defendants from engaging in any commodity-related activity, including trading and registering with the CFTC
The order follows a verdict returned on February 3, 2011 against Donovan Davis Jr. and Bromfield by a jury in Orlando, Fla., that heard testimony and arguments for almost three weeks. In 2009, the CFTC charged the defendants with operating a fraudulent commodity pool that solicited approximately $17 million from about 100 investors purportedly to invest in off-exchange foreign currency futures (see CFTC Press Release 5643-09, April 7, 2009).
According to the evidence adduced at trial, Donovan Davis Jr. (through his wholly owned company, DDIH) and Bromfield were two of the three principals of Capital Blu, a commodity pool operator that managed a foreign currency trading fund called the CBM FX Fund, LP. Donovan Davis Jr. was Capital Blu’s Director of Corporate Affairs and Bromfield was its Director of Operations. The third principal of Capital Blu, Blayne Davis, was the Director of Trading. Because Blayne Davis, Capital Blu and DDIH did not respond to the CFTC’s complaint, the court entered default judgments against them.
According to the evidence presented at trial, Capital Blu began soliciting participants for the CBM FX Fund in August 2007 and ultimately obtained contributions from participants totaling approximately $17 million. In January 2008, the CBM FX Fund sustained losses of about $1.8 million. Instead of reporting a loss for the month to the participants, Donovan Davis Jr. instructed Capital Blu’s Controller to report a 1.6 percent gain for January 2008. Thereafter, Bromfield, Donovan Davis Jr. and Blayne Davis developed and implemented a plan to put the money that had been lost back into the CBM FX Fund, which included raising additional funds from new participants, trading aggressively and falsifying statements to participants.
At roughly this same time, Capital Blu’s expenses began to exceed its revenue. At the direction of its principals, Capital Blu began to pay operating expense with money from the CBM FX Fund. These expenses included the purchase and operation of a jet.
After some short-term trading success from April to July 2008, in August 2008 the CBM FX Fund sustained millions of dollars in losses. Instead of reporting these losses, Bromfield and Donovan Davis Jr. again provided participants with falsified statements and reported a 0.16 percent profit for August 2008. Bromfield and Donovan Davis Jr. also sent participants a notice that their funds would be locked up for four months. All the while, Bromfield, Donovan Davis Jr. and Blayne Davis continued to use CBM FX Fund money to pay operating expenses, including their own salaries of $15,000 per month each. Capital Blu’s operations were shut down after the National Futures Association (NFA) conducted a surprise audit in September 2008 after receiving information from several sources, including an employee of Capital Blu.
During the trial and a subsequent damages hearing conducted on March 2, 2011 before Judge Antoon, the CFTC established that, from January 2008 through September 2008, the CBM FX Fund sustained trading losses of approximately $5.4 million and defendants misappropriated approximately $2.46 million of participants’ funds. Judge Antoon ordered the defendants to pay the amount misappropriated as restitution and ordered a civil monetary penalty equal to twice the amount that the defendants misappropriated.
The CFTC thanks the NFA for its assistance.”
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