Aggregated News From Investment Management Regulators

CFTC Charges Five Entities and Five Individuals with $58 Million Foreign Currency Fraud and Misappropriation Scheme

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— The Commodity Futures Trading Commission today announced it filed a civil enforcement action in the U.S. District Court for the Southern District of Florida, charging five individuals and five companies with fraud, misappropriation, and registration violations in connection with a fraudulent foreign currency (forex) scheme. 

The complaint charges defendants Jase Davis of Brandon, Mississippi; Borys Konovalenko of Ukraine; Anna Shymko of Duluth, Georgia; Alla Skala of Grand Island, New York and/or Fort Erie, Canada; Timothy Stubbs of Brandon, Mississippi and/or Atlanta, Georgia; Notus LLC d/b/a ROFX, a Colorado limited liability company; Easy Com LLC d/b/a ROFX, a New Hampshire limited liability company; Global E-Advantages LLC a/k/a Kickmagic LLC d/b/a ROFX, a Delaware limited liability company and New York foreign limited liability company; Grovee LLC d/b/a ROFX, a Delaware limited liability company; and Shopostar LLC d/b/a ROFX, a Colorado limited liability company. 

The complaint alleges that during the relevant period, from approximately January 2018 through September 2021, the companies, acting as a common enterprise under the control of the individual defendants, used the ROFX.net website to fraudulently solicit and misappropriate at least $58 million from U.S. and international customers for purported trading in forex. 

The CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and permanent injunctions against further violations of the Commodity Exchange Act and CFTC regulations, as charged.

Case Background    

The complaint charges that, during the relevant period, defendants did business as ROFX and acted through ROFX’s website, ROFX.net, which solicited and obtained customers on defendants’ behalf and falsely claimed to trade forex utilizing a highly successful automated trading robot with guaranteed coverage of losses. According to the complaint, over 1,100 customers opened trading accounts through the ROFX website and deposited funds via checks or wires to bank accounts in the name of one or more of the companies, all controlled by the individual defendants. 

As alleged, the defendants received at least $58 million from customers during the relevant period, all of which the defendants misappropriated by wiring to non-trading corporate entities in Poland, Thailand, and elsewhere, as well as to the individual defendants themselves. The complaint also alleges that the companies acted as futures commission merchants by doing business as ROFX, soliciting or accepting orders for retail forex transactions via the ROFX website, and accepting funds in or in connection with such transactions without being registered with the CFTC.    

The CFTC cautions victims that restitution orders may not result in the recovery of money lost, because the wrongdoers may not have sufficient funds or assets. 

The Division of Enforcement thanks and acknowledges the assistance of the Alabama Securities Commission, Mississippi Secretary of State’s Office (Securities Division), Rankin County (Mississippi) Sheriff’s Office, Oregon Division of Financial Regulation, Ontario Securities Commission, and Polish Financial Supervision Authority. 

CFTC Division of Enforcement staff members responsible for this case are Danielle Karst, Timothy J. Mulreany, George H. Malas, Hillary Van Tassel, and Paul G. Hayeck.

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CFTC’s Forex Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories and Articles that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which alerts customers to forex fraud and lists simple ways to spot forex scams.

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), file a tip or complaint online, or contact the Whistleblower Office

Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.  

This news item was originally published by the Commodity Futures Trading Commission (CFTC US). For more information, see the Source Link.

Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

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