The U.S. Commodity Futures Trading Commission has filed a lawsuit against Cash FX Group S.A., its CEO Huascar Jose Lopez Castillo, The Conversion Pros Inc., its CEO Ronald Pope, and Justin Halladay. The regulator alleges the defendants ran a multi-level marketing Ponzi scheme that raised more than $950 million from the public, including people in the United States, under the claim that the money would be used for retail forex trading.
According to the CFTC, the defendants falsely told participants that funds were being traded by professional traders, proprietary algorithms, and artificial intelligence, while promising returns of as much as 15% per week. The agency said Cash FX carried out only limited forex trading and that nearly all participant funds were misappropriated. It also alleged that money from newer participants was used to pay fake trading profits to earlier participants and to deliver millions of dollars to the defendants.
The CFTC said Cash FX provided false account statements to keep up the appearance of strong trading performance. The agency alleges participants lost at least $406 million. It is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and a permanent injunction.
The U.S. Commodity Futures Trading Commission, or CFTC, has sued Cash FX Group S.A.; its CEO, Huascar Jose Lopez Castillo; The Conversion Pros Inc.; its CEO, Ronald Pope; and Justin Halladay, alleging that they operated a multi-level marketing Ponzi scheme that raised more than $950 million from the public, including people in the United States, for supposed retail forex trading.
The CFTC said the defendants falsely claimed that participant funds were traded by professional traders, proprietary algorithms, and artificial intelligence, while promising returns of up to 15% a week. According to the agency, Cash FX conducted only limited forex trading, and nearly all participant funds were misappropriated. The complaint also alleges that money from new participants was used to pay fictitious trading profits to other participants, while millions of dollars were paid to the defendants.
The regulator also said Cash FX provided false account statements to maintain the appearance of high trading returns. Participants suffered at least $406 million in losses, according to the CFTC.
The agency is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and a permanent injunction against the defendants.
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