In a default judgment, Kevin Andre Perry and Lucrative Pips Corporation of Atlanta, Georgia were ordered to pay a civil penalty of $2 million and restitution of almost $700,000 with respect to their fraudulent marketing of a foreign exchange pool. Defendants told prospective pool participants that their funds were “guaranteed” against trading losses and that their accounts would grow in value by 200% to 350% in less than 60 days. Defendants then failed to return funds when customers tried to later withdraw them. CFTC
After being charged in 2017, Thomas Lanzana, Blackbox Pulse, LLC, Nikolay Masanko, and White Cloud Mountain, LLC have been ordered to pay more than $2.7 million in restitution and civil penalties in connection with their marketing of a foreign exchange trading scheme through which they fraudulently solicited and accepted funds from customers for the purported purpose of trading forex in a commodity pool. In fact, defendants misappropriated customers' funds, fabricated account statements, and misrepresented trades and balances. CFTC
Top Ten Federal Financial Fraud Recoveries of 2018
While 2018 has been a banner year for FCPA, Tax, and SEC & CFTC recoveries, in the bottomless pit of financial frauds that hurt taxpayers, the government, consumers, investors, and the American economy, 2018 brought us additional stunning recoveries for violations related to residential-mortgage backed securities, international economic sanctions, consumer protection, anti-money-laundering, EB-5 investment fraud, and...
Two brokerage firms, UK-based TFS-ICAP LIMITED and New York-based TFS-ICAP LLC, pled guilty to securities fraud under New York's Martin Act for their roles in posting fake trades, bids, and offers by inter-dealer brokers for emerging market foreign exchange currency options. The fake trades were intended to create a false appearance of liquidity in the emerging markets FX options market and encourage traders to buy and sell FX options via TFS-ICAP rather than other brokers. In addition to the criminal pleas by the companies, a civil settlement requires them to implement remedial procedures, retain an independent monitor, pay $1.5 million, and cooperate in ongoing investigations. NY AG.
A federal court in Utah has ordered an Estonian currency dealing company, Tallinex, to pay $10.2M in restitution and an additional $681K in fines for operating as an unregistered foreign exchange dealer and soliciting US customers. The CFTC also alleged that Tallinex defrauded its customers by making false or misleading representations about customer funds being protected in case of the company’s collapse. A Nevada-based broker, General Trader Fulfillment, that introduced American customers to Tallinex was also ordered to pay an $85k civil penalty. CFTC
The CFTC issued an order against Société Générale S.A. settling charges of manipulation of Yen LIBOR, attempted manipulation and false reporting of Euribor and U.S. Dollar, Yen and Euro LIBORs, and aiding and abetting traders at another bank in their attempts to manipulate Euribor. The bank engaged in this misconduct to make money on its trading positions and to protect its reputation from speculation that it was having more difficulty borrowing unsecured funds than other banks. Société Générale will pay a civil monetary penalty of $475 million, cease and desist from further violations, and adhere to specific undertakings to ensure the integrity of its LIBOR, Euribor, and other benchmark interest rate submissions in the future. CFTC
New York and over forty other states announced a $100 million dollar settlement with Citibank to resolve allegations that the bank fraudulently manipulated U.S. Dollar LIBOR, a critical interest-rate benchmark that impacts global financial instruments worth trillions of dollars. The New York Attorney General’s Office led the investigation, which found evidence that Citibank made material misrepresentations and omissions regarding the LIBOR benchmark to state and local governments, as well as non-profit, private, and institutional counterparties. The states alleged that Citibank entered numerous LIBOR-referenced transactions without disclosing that it had reason to believe that its own LIBOR submissions did not accurately represent its borrowing rates. NY
Mark Johnson, former head of global foreign exchange cash trading at HSBC Bank, was found guilty for his role in a scheme to defraud an HSBC client through a multimillion-dollar scheme commonly referred to as “front running.” DOJ
New York Hits Credit Suisse with $135M Fine for Forex Violations
By the C|C Whistleblower Lawyer Team
Credit Suisse AG agreed to pay a $135 million fine to settle charges by the New York State Department of Financial Services (DFS) that the bank violated New York banking law through a variety of illegal activities that disadvantaged customers. Specifically, the government found that from at least 2008 to 2015, Credit Suisse "consistently engaged in unlawful, unsafe and unsound...
The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Eastern District of New York against Defendants Daniel Winston LaMarco and his company, GDLogix Inc., charging them with off-exchange foreign currency derivatives (forex) fraud, commodity pool fraud, and failure to register with the CFTC, as required. LaMarco previously resided in Huntington, New York, and GDLogix’s last known principal place of business was in Huntington, New York. Neither Defendant has ever been registered with the CFTC. CFTC