The U.S. Commodity Futures Trading Commission said on Sept. 25 that it had filed a civil enforcement action in the U.S. District Court for the Middle District of Florida against Cash FX Group, its CEO Huascar Jose Lopez Castillo, The Conversion Pros, its CEO Ronald Pope, and Justin Halladay. According to the regulator, the defendants ran a multi-level marketing Ponzi scheme that illegally solicited more than $950 million from the public, including U.S. residents, while claiming the money would be used to trade retail forex contracts.
The CFTC alleged that Cash FX promised returns of as much as 15% a week, but carried out only limited forex trading in practice. The agency said nearly all participant funds were misappropriated, with money from newer participants used to pay purported trading profits to earlier ones and millions of dollars paid to the defendants. The complaint also alleges the company kept the scheme going by issuing false account statements.
The regulator said participants suffered at least $406 million in losses. It is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and a permanent injunction barring further violations of the Commodity Exchange Act and CFTC regulations.
The U.S. Commodity Futures Trading Commission said on Sept. 25 that it had filed a lawsuit in the U.S. District Court for the Middle District of Florida against Cash FX Group, its CEO Huascar Jose Lopez Castillo, The Conversion Pros, its CEO Ronald Pope, and Justin Halladay.
The CFTC alleged that the defendants operated a multi-level marketing Ponzi scheme that illegally raised more than $950 million from the public, including U.S. residents. The agency said the scheme told participants their money would be used to trade retail forex contracts and promised investment returns of up to 15% a week.
CFTC says only limited forex trading took place
According to the complaint, Cash FX conducted only limited forex trading, while nearly all participant funds were misappropriated.
The regulator said money from new participants was used to pay fake trading profits to other participants, and that millions of dollars were paid to the defendants. The company also allegedly sustained the scheme by providing false account statements.
Agency seeks restitution, penalties, and permanent bans
The CFTC said participants suffered at least $406 million in losses.
It is seeking restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction to stop the defendants from further violations of the Commodity Exchange Act and CFTC regulations.
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