CFTC slap $32 million in fines on 'FX swindlers'
In mid-April, the US Commodity Futures Trading Commission (CFTC) granted a permanent injunction against Ronald Steven Holt and three associated companies for financial misdemeanours, while fining them a total of $32 million.
The businesses – the International Funding Association and Global Management Group, from Arizona, and Cambridge Global Group – were fined $32 million.
The fines amount to the settling of a debt that was raised when Holt was initially found guilty of defrauding customers in 2003.
Gregory Mocek, director of the CFTC's division of enforcement, said the case demonstrates the high priority placed on pursuing "foreign currency swindlers" and freezing their assets to give back to retail victims. However, he said customers also need to be aware of the dangers: "Customers should not enter into investments with blindfolds on and expect that everyone in the market-place is legitimate," he said.
The CFTC charged that since 1997, Holt and his businesses fraudulently solicited around $25 million from roughly 2,500 clients for trading futures contracts, including foreign currencies. These included using false claims that he achieved investment returns of 7–10% per month.
The order also found that the defendants traded illegal futures contracts and misappropriated at least $14 million of the clients' $25 million.
The commission said the defendants used the funds to purchase residential property and various items. They were held to be jointly and severally liable to pay a judgment totalling nearly $32 million. This comprises over $14 million for repayment to defrauded customers, around $1.5 million in interest and approximately $16 million in monetary penalties. OR&C
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Swiss report fingers Finma on Credit Suisse capital ratio
Parliament says bank would have breached minimum requirements in 2022 without regulatory filter
‘It’s not EU’: Do government bond spreads spell eurozone break-up?
Divergence between EGB yields is in the EU’s make-up; only a shared risk architecture can reunite them
CFTC weighs third-party risk rules for CCPs
Clearing houses could be required to formally identify and monitor critical vendors
Why there is no fence in effective regulatory relationships
A chief risk officer and former bank supervisor says regulators and regulated are on the same side
Snap! Derivatives reports decouple after Emir Refit shake-up
Counterparties find new rules have led to worse data quality, threatening regulators’ oversight of systemic risk
Critics warn against softening risk transfer rules for insurers
Proposal to cut capital for unfunded protection of loan books would create systemic risk, investors say
Barr defends easing of Basel III endgame proposal
Fed’s top regulator says he will stay and finish the package, is comfortable with capital impact
Bank of England to review UK clearing rules
Broader collateral set and greater margin transparency could be adopted from Emir 3.0, but not active accounts requirement