Aggregated News From Investment Management Regulators

CFTC Charges Colorado Resident with Fraud in Digital Asset-Linked Ponzi Scheme

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February 14, 2020

Washington, D.C. — The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the U.S. District Court for the District of Colorado against Breonna Clark, of Denver, Colorado, and Venture Capital Investments Ltd., a Colorado limited liability company, charging them with fraud and failing to register with the CFTC.

 

The complaint charges that the defendants solicited U.S. residents to trade foreign currency (forex) contracts as well as Bitcoin and other digital assets through a commodity pool operated by the defendants. In connection with these solicitations, the defendants collected $534,829 from approximately seventy-two individuals. Rather than trade, the defendants used at least $418,000 of the funds for personal expenses—including acquiring a BMW automobile—and to make Ponzi-type payments to other pool participants.

 

The complaint also alleges that the defendants fraudulently solicited prospective pool participants by misleading customers about their experience, expertise, and investment track record while promising future profitability trading forex and digital assets. The complaint further alleges that to conceal their misappropriation, the defendants sent pool participants false account statements, which purported to show trading gains.  In addition, the defendants were charged with failing to appropriately register with the Commission pursuant to the Commodity Exchange Act and regulations.

 

In its litigation against the defendants, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act, as charged.

 

The CFTC thanks and acknowledges the assistance of the Financial Supervision Commission of Bulgaria, Financial Markets Authority of New Zealand, Seychelles Financial Services Authority, St. Vincent and the Grenadines Financial Services Authority, and the United Kingdom Financial Conduct Authority.

The Division of Enforcement staff members responsible for this case are Kevin Samuel, Erica Bodin, Kim Bruno, Michael Solinsky, and Rick Glaser.

 

* * * * * * *

 

CFTC’s Foreign Currency (Forex) Fraud Advisory

 

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify these scams.

The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

 

-CFTC-

Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

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