A North Carolina judge recently granted a CFTC motion to bring default judgment against Mark Pyatt for operating a fraudulent FX scheme. The Haywood County resident used the alias Daniel G. Randolph and operated a Ponzi-scheme in the forex industry.
Conning victims of thousands of dollars
Pyatt was sentenced to 37 months in prison and imposed a fine of $255k for operating a fraudulent forex scheme. Court documents suggest that Mark worked as the vice president and investment consultant at Winston Reed Investments LLC (WRI). He solicited victims to invest in forex trading and commodity futures pools. The scheme, which operated between April 20187 and February 2019 scammed 19 customers and netted over $200,000 from the same.
Pyatt also used the alias Daniel G. Randolph and coerced the victims to lure their friends and acquaintances in the investment scheme run by his company. Apart from 37 months in prison, he will also serve three years under court supervision post-released. He will pay $275,000 as restitution to his victims. The unregulated money manager claimed to be a successful forex trader to users, while he was losing money on his personal trades.
Pyatt touted his experience to lure victims
The Haywood County-based Pyatt told his customers that his company is offering a safe investment with steady returns. He called them to experience the wealth that he was enjoying. According to the Commodity Futures Trading Commission (CFTC), the pool did not generate any income from trading forex. Instead, Pyatt ended up losing almost all the money of the pool participants’ funds.
The complaint further suggests that despite making an overall net loss, Pyatt and WRI lured customers by showing off their experience in the industry. They also sent customers fabricated account statements which showed massive profits ranging between 19% and 86% per month. He later told investors that all the money was lost as the broker-dealer did not follow his instructions.
The agency also said that the company accepted client trades and funds, which made them function like an Eligible Contract Participant (ECP). Working as an ECP requires licensing from the CFTC, which the firm doesn’t possess. Pyatt spent $150,000 of his clients’ funds on personal purchases including a Chevrolet Corvette, jewelry, and cigars.
