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Fraud in CFTC-Regulated Markets

This archive displays posts tagged as relevant to fraud in markets regulated by the Commodity Futures Trading Commission, the CFTC, or governed by the Commodity Exchange Act, the CEA. You may also be interested in the following pages:

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Catch of the Week — Yukom Communications and Others Face CFTC Claims of Binary Options Fraud

Posted  08/16/19
computerized trading
The Commodity Futures Trading Commission filed suit against five entities and four individuals on August 12, 2019, in the Northern District of Illinois for running a $103 million fraudulent binary options scheme. The defendants, led by Israeli company Yukom Communications Ltd.,which marketed binary options using two websites known as BinaryBook and BigOption. In recent years, the CFTC has targeted fraudulent binary...

August 15, 2019

Kraft Foods Group and Mondalēz Global LLC have been ordered to pay a $16 million penalty for allegedly manipulating the wheat market in the summer of 2011.  Defendants’ orders for wheat futures contracts worth $90 million resulted in false demand signals, and accomplished the actual goal of defendants, which was to narrow the price spread on wheat futures, and lower cash wheat prices.  Defendants were able to earn more than $5 million in profits.  CFTC

August 9, 2019

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

August 8, 2019

Lee Elbaz was found guilty of orchestrating a scheme to defraud U.S. investors, wrongfully obtaining $145 million in investor funds.   Yukom Communications, Ltd., with Elbaz as the CEO, used the websites BinaryBook and BigOption to market "binary options" to investors.  Elbaz and Yukom falsely claimed to represent the interests of investors when, in fact, they profited when investors lost money, and made false statements about binary option suitability and expected returns, their identity and qualifications, and the ability of investors to withdraw funds.  Elbaz will be sentenced in December, 2019.  DOJ

July 19, 2019

Kelvin Ramirez of Houston, Texas, was ordered to pay more than $2.9 million – $2.2 million as a civil penalty, and $736,000 in restitution – in a default judgment that also permanently barred him from trading in any CFTC-regulated market or registering with the CFTC.  Ramirez solicited clients through social media platforms, offering bogus forex trading schemes.  CFTC

July 18, 2019

Swapnil Rege, who worked as a portfolio manager for a hedge fund that operated as a commodity pool operator, was been ordered by the CFTC  and SEC to pay a $100,000 civil penalty and disgorge a $600,000 performance bonus he received as a result of his fraudulent mismarking the valuations of interest rate swaps.  The mismarking, accomplished through various means, artifically inflated the profitability of his trades, earning him a larger performance bonus.  SEC, CFTC

July 12, 2019

Korea Exchange, Inc., based in Busan, Korea, will pay $150,000 and implement financial management standards in settlement of charges by the CFTC that the company falsely certified to the Commission that it was in compliance with specified international financial management standards and testing requirements.  KRX had made the certification in order to maintain its exemption from certain registration requirements.  CFTC

June 25, 2019

Merrill Lynch Commodities, Inc. (MLCI) has agreed to pay $25 million for spoofing and manipulating the precious metals market on the Commodity Exchange from 2008 to 2014.  In the non-prosecution agreement signed with DOJ, MLCI admitted that its employees had placed thousands of fraudulent orders to create a false sense of demand and induce other market participants to make purchases or sales.  CFTC, DOJ

April 29, 2019

In an enforcement action initiated by the CFTC, Michael Shah and Zilmil, Inc., both of Jacksonville, Florida, have been ordered to pay nearly $23 million for their roles as "affiliate marketers" for unregistered binary options trading schemes, targeting consumers with false and misleading advertising for the trading systems.  CFTC

April 2, 2019

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
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