The US Commodity Futures Trading Commission (CFTC) Has moved to court against a number of alleged fraudulent forex scheme operators. All of these operators had collectively accepted a minimum of $4.75 million from a minimum of 150 participants in total.
The Funds In Question
The court documents in question were filed on Wednesday, and named five companies alongside their operators: Highrise Advantage and Avinash Sing, Bull Run Advantage and Randy Rosseau, Green Knight Investments, and Daniel Colegero, King Royalty and Hemraj Singh, as well as SR&B Investment Enterprises and Surujpaul Sahdeo. All of these parties have been accused of soliciting and subsequently misusing the funds.
The various investments schemes of these companies started in or around February of 2013. However, it should be noted that all of these schemes are still accepting funds at this time.
Lies And Misappropriation
This scheme operated by way of pools. Highrise acted as the master commodity pool, with the four other companies serving as feeder pools, funneling the majority of their deposits into Highrise.
Singh approached various pools and investors, painting himself to be an experienced trader in both commodities and forex. From there, he even showed false track records, showing only positive gains and no losses to speak of.
According to the CFTC’s claims, Singh and Highrise had only traded a small portion of the collected proceeds. The rest was misappropriated, with more than $3 million used for personal expenses. Singh made use of a Ponzi-type payment scheme for other pool participants, handing payouts to the feeder funds, as well.
Ponzi-Like Payment Plans
Alongside this, Highrise had also been accused of issuing and displaying falsified monthly statements to investors. These statements misrepresented the balances and profits that these investors had made.
The CFTC took note that Bull Run, Green Knight, as well as King Royalty, issued similar monthly account statements to their respective pool participants. These statements further misrepresented the balances and profits of the individual interests of the pool participants.
The Charges In Question
The CFTC is charging the various funds for not registering as certified commodity pool operators (CPOs). Alongside this, for the alleged operations, all the funds and their operators have been accused of violating CFTC Regulations, as well as the Commodity Exchange Act.
Alongside the typical remedial ancillary reliefs and civil monetary penalties, the CFTC is pushing for the court to issue out an injunction against these funds. Alongside this, they are seeking for registration and trading bands, pre- and post-judgment interest, disgorgement, as well as rescission.