Aggregated News From Investment Management Regulators

CFTC Wins Forex Fraud Trial on Damages and Obtains Monetary Judgment of More than $22.6 Million


Please complete the required fields.

February 21, 2020

Court Releases Pallet of Foreign Currency Valued at $2.5M to CFTC

Washington, D.C. — The Commodity Futures Trading Commission today announced that following a bench trial the U.S. District Court for the Middle District of Alabama entered a final judgment against defendants Husam Tayeh of Illinois and his companies, Dinar Corp., Inc. and My Monex, Inc., both Nevada corporations. The court’s ruling orders the defendants to pay more than $22.6 million in disgorgement and civil monetary penalties in connection with Tayeh’s fraudulent foreign currency (forex) scheme. The court previously found the defendants liable for violations of the Commodity Exchange Act, including fraud.

“This ruling reaffirms the CFTC’s commitment to working in parallel with our enforcement counterparts at the federal, state, and local level,” said CFTC Director of Enforcement James McDonald. “The CFTC remains committed to working closely with other regulators and criminal authorities to root out fraud in our markets. I’m grateful to the Alabama Securities Commission, the U.S. Attorney’s Office for the Middle District of Alabama, the Federal Bureau of Investigation, and local law enforcement for their assistance in this matter.”

 “We applaud the work of the CFTC in its successful judgment, and we will continue to assist and engage in cooperative enforcement efforts with our federal partners to combat fraudulent practices in currency and commodity trading,” said Alabama Securities Commission Chief Deputy Director Amanda Senn.

The verdict in this case stems from a July 27, 2015 complaint filed by the CFTC. [See CFTC Press Release No. 7206-15] The complaint charged the defendants with fraudulently soliciting customers to engage in financed retail forex transactions, primarily involving Iraqi Dinar and Vietnamese Dong, misappropriating customer funds, and various registration violations. The complaint also charged Theodore S. Hudson, II and his company, My Monex, Inc., an Alabama corporation, as relief defendants for receiving funds that were obtained as a result of the defendants’ fraud and to which they have no legitimate claim. The CFTC’s charges against Hudson and his company were resolved via consent order of statutory and equitable relief entered by the court on February 12, 2018. 

On February 6, 2018, the court entered an order finding the defendants liable on each of the four counts alleged in the complaint and imposing a permanent injunction. The defendants consented to liability but left the issues of disgorgement and civil monetary penalties to be determined by the court. The parties proceeded to trial on August 12, 2019. On February 14, 2020, U.S. District Court Judge Andrew L. Brasher resolved those issues by entering a final judgment against the defendants, ordering them to pay disgorgement of $22,559,153 and a civil monetary penalty of $140,000. The court also entered a memorandum opinion with findings of fact and conclusions of law in the matter. 

Court Releases a Pallet of Currency to the CFTC as an Offset Against the Final Judgment

In a separate order, the court released to the CFTC a pallet of Iraqi Dinar and Vietnamese Dong that had been seized from the defendants as an offset against the final judgment, which, at the time of seizure, was valued at more than $2.5 million USD. 

Related Criminal Action

In a related criminal action, on June 7, 2016, the U.S. Attorney’s Office for the Middle District of Alabama charged Tayeh by criminal information with one count of wire fraud. [See United States v. Tayeh, Case No. 1:16-cr-213 (M.D. Ala.)]. Tayeh pleaded guilty on June 11, 2016. He was sentenced to a term of imprisonment of one year and one day and ordered to both forfeit more than $8 million and pay $151,517 in restitution to identified victims.

The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Middle District of Alabama, the Federal Bureau of Investigation, the Alabama Securities Commission, the Dothan, Alabama Police Department, and the Houston County, Alabama Sheriff’s Office. 

The Division of Enforcement staff members responsible for this case are Timothy J. Mulreany, Danielle Karst, Patricia Gomersall, Hillary Van Tassel, and Paul G. Hayeck.


Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

Recent Articles

SEC Charges Crypto Entrepreneur Justin Sun and his Companies for Fraud and Other Securities Law Violations

Eight celebrities also charged for illegal touting of Sun’s crypto asset securities The Securities and Exchange Commission today announced charges against crypto asset entrepreneur Justin Sun and t

SEC Proposes to Modernize the Submission of Certain Forms, Filings, and Materials Under the Securities Exchange Act of 1934

The Securities and Exchange Commission today proposed amendments designed to modernize its information collection and analysis methods by, among other things, proposing that a number of filings be su | Statement on Electronic Filing

Today, the Commission is considering a proposal under the Exchange Act to require broker-dealers and other registrants to submit forms electronically.

ASIC suspends AFS licence of Cartesian Corporate Finance Limited

ASIC has suspended the Australian financial services (AFS) licence of Cartesian Corporate Finance Limited (Cartesian) until 25 August 2023. The licence authorises Cartesian to deal...

Completion of Recovery Certificate No. 6075 of 2022 issued against Mr. Yash Paul Jindal [Defaulter] PAN: ACDPJ8198B in the matter of GDR Issue by...

This news item was originally published by the Securities and Exchange Board of India (SEBI IN). See the article here: Read more

Get the latest from Regulatory.News in your inbox!