Aggregated News From Investment Management Regulators

Federal Court Orders Defendants to Pay Over $1.7 Million to Settle CFTC Enforcement Action Charging Fraud and False Statements

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April 23, 2020

Washington, D.C. — The Commodity Futures Trading Commission announced that the U.S. District Court for the Southern District of New York entered a consent order of permanent injunction against defendants Simon Jousef of Ontario, Canada and his business, FuturesFX, imposing more than $1.7 million in civil monetary and equitable relief. The injunction and sanctions resolve a CFTC enforcement action filed on September 10, 2019 [See CFTC Press Release No. 8006-19]. The CFTC’s complaint charged the defendants with fraudulently soliciting members and prospective members in the United States and other countries to subscribe to a trading system that included a supposedly “live” foreign exchange (forex) and commodity futures online trading room, educational videos, and online support. The CFTC also charged Jousef with making false or misleading statements to the National Futures Association (NFA).

The consent order requires the defendants to pay jointly and severally restitution of $1.3 million to defrauded members and a $450,000 civil monetary penalty. The order also imposes certain permanent trading and registration bans against all defendants and a permanent injunction prohibiting them from further violating provisions of the Commodity Exchange Act and CFTC regulations, as charged.

The order finds that from at least July 1, 2014, to on or about January 31, 2016, Jousef and FuturesFX fraudulently promoted and sold access to the trading system ostensibly to provide, among other things, a methodology for determining when to enter and exit forex and commodity futures contracts. According to the order, to induce members and prospective members to purchase subscriptions to the trading system, defendants made numerous materially false and misleading statements and omissions on the company’s websites, in the online trade room, and in email advertisements. The order also finds that, as a result of the fraudulent solicitation scheme, defendants received approximately $1.3 million in subscription fees from more than 300 members located in the United States and abroad

In addition, the order finds that Jousef knowingly made false or misleading statements regarding material facts to the NFA when he submitted annual CTA registration updates concerning FuturesFX’s predecessor company.

The CFTC appreciates the cooperation and assistance of the Ontario Securities Commission and the NFA in this matter.

The Division of Enforcement staff members responsible for this case are Steven Kim, Kara Mucha, Kathleen Banar, and Rick Glaser.

* * * * *

CFTC’s Fraud Advisory on Commodity Trading Systems Sold on the Internet

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including one pertaining to commodity trading systems sold on the internet. The advisory states that the CFTC has seen an increase in websites fraudulently promoting commodity trading systems and advisory services.

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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