A US
district court in Wisconsin has ordered a commodity pool operator Kay Yang and
her companies to pay over $24 million for a retail forex fraud that targeted
members of the Hmong minority group in
the country.
The payment comprises $13.6 million in restitution payment and $10.3 million in civil monetary
penalty.
The
Commodity Futures Trading Commission (CFTC) announced the order in a statement
released today (Thursday), noting that the court entered the judgment last
Monday. The court also demanded that Chao Yang, Kay’s husband, pay $1.4 million
in illegal funds he received from the scheme.
Multi-million
FX Trading Fraud
CFTC sued Kay and her
companies, AK Equity
Group LLC and Xapphire LLC in April last year, alleging that they illegally
solicited at least $15.7 million from about 67 investors to participate in a commodity pool supposedly to trade forex. At the time, the
Securities and Exchange Commission (SEC) also charged Kay to court in
connection with the scheme.
Through the
scheme, which lasted between April 2017 and March 2020, Yang and her companies
“made several false representations and materials omissions,” CFTC said.
“The
defendants also misappropriated at least $4.8 million of pool participants’
funds and spent that money on Yang’s personal expenses, including spending
nearly $1.4 million at casinos and on luxury hotels and cars,” CFTC explained.
CFTC
Continues Crackdown on FX Fraud
The latest
court order comes even as CFTC continues to battle fraudulent and unregistered
forex firms operating in the country. In late April, the derivatives watchdog charged 14 retail FX
dealers and
futures commission merchants for ‘fraudulently claiming’ to be registered with
the agency. Some of the dealers, which claim to be based
in the US, UK and Sweden, include
Cross Trade FX, Volfxtrade, TFX Trading and Bit Trading.
Earlier in February,
the CFTC also sued five individuals and three associated companies for three
interconnected $145 million forex trading Ponzi schemes through which they allegedly defrauded
more than a thousand investors. The regulator is seeking to recover the
investors’ funds and secure civil penalties against the individuals.
ASIC cancels license; BaFin probes illegal trading brands; read today’s news nuggets.
This article was written by Solomon Oladipupo at www.financemagnates.com.
