US CFTC Charges Texas Man for Allegedly Running a Forex Trading Pool Fraud

The US Commodity Futures Trading Commission (CFTC) announced on Wednesday that it had filed a civil enforcement action against Troy Manson and his company ZTegrity, Inc., for allegedly being involved in a forex-related fraud. According to the press release, Mason and the firm were charged before the US District Court for the Southern District of Texas with fraudulent solicitation and failing to register with the CFTC as required by the Commodity Exchange Act (CEA).

Early in the month, the court issued a restraining order that froze assets that required preserving the documents to pursue the investigation. That said, the CFTC is seeking the full restitution to defrauded clients, civil monetary penalties, permanent registration, and trading bans, plus a permanent injunction against further violations of the CEA.

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Per the complaint, from around October 2019, the defendants relied on various websites and social media profiles to promote forex trading pools that offered high yield returns on investments with low or no risk, dubbed “The Black Club” and “The Forex Savings Club.” The website claimed that it collected over $460,000 from 411 investors.

Background

“The complaint further alleges the defendants induced participation in their forex trading pool by falsely claiming to ‘guarantee’ to repay participants the funds they contributed to their individual ‘Forex Savings Accounts’ and falsely offered participants ‘with a 100% certainty’ portions of the ‘substantial profit[s]’ to be generated using participants’ pooled funds to trade forex. Rather, as alleged in the complaint, the defendants knew or recklessly failed to appreciate that no forex trader can guarantee profitable trading, or the avoidance of losses required to guarantee all participants’ contributions, and knew, but failed to inform participants that they had no U.S.-based forex trading accounts,” the CFTC noted.

In May, Finance Magnates reported that the CFTC moved against two commodity pool operators and charged LJM Partners Ltd and LJM Funds Management Ltd, which collectively operated as LJM, with commodity pool fraud and for releasing false statements about losses. In addition, charges were brought against Anthony J. Caine, Chairman, and owner of the two companies, and Anish Parvataneni, Chief Portfolio Manager.

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