Washington, D.C. — The Commodity Futures Trading Commission today announced that it has filed a complaint in the U.S. District Court for the Northern District of Texas against Kenzley Ramos, a Georgia resident, charging him with fraudulent solicitation, misappropriation, operation of an unlawful commodity pool, and failure to register with the CFTC.
According to the complaint, Ramos falsely promised individuals the ability to profit from the COVID-19 pandemic by trading in off-exchange foreign currency (forex) and binary options with guaranteed 300 percent weekly returns. This is the second enforcement action brought by the CFTC alleging misconduct directly tied to the pandemic. [See CFTC Press Release No. 8195-20]
“We will continue monitoring our markets and will pursue any individuals who choose to use COVID-19 as part of their illegal schemes,” said Division of Enforcement Director James McDonald.
Related Criminal and Civil Actions
In a parallel criminal action, the U.S. Attorney’s Office for the Northern District of Texas today announced Ramos’s arrest on one count of commodities fraud. The Texas State Securities Board previously issued an emergency cease and desist order against Ramos, alleging securities fraud, misappropriation, and registration violations.
The complaint alleges that from at least December 2015 until the present, Ramos fraudulently solicited individuals across the country by using online advertisements and aliases to further his ongoing scheme, incorporating COVID-19 into his solicitations earlier this year. He falsely represented himself as a highly successful and experienced binary options and forex trader who could profit from the coronavirus even while stock prices were falling. Ramos offered to pool funds sent to him by participants to trade binary options and forex, but instead simply misappropriated the money. As alleged, Ramos has no U.S.-based binary options or forex trading accounts.
The complaint further alleges that, despite receiving a cease and desist letter from the Texas State Securities Board related to these fraudulent solicitations, Ramos continued to solicit participants and engage in his fraudulent scheme.
In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations, as charged.
The CFTC acknowledges and thanks the U.S. Attorney’s Office for the Northern District of Texas and the Texas State Securities Board for their assistance in this matter.
The Division of Enforcement staff members responsible for this matter are Brett Shanks, J. Alison Auxter, Allison Sizemore, Jeff Le Riche, Christopher Reed, and Charles Marvine.
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CFTC’s Commodity Pool and Forex Fraud Advisories
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory and the Foreign Currency Trading (Forex) Fraud Advisory, which alert customers these types of fraud and list simple ways to spot them.
The CFTC also strongly urges the public to verify a company’s or individual’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that company or individual. A company’s or individual’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.