The CFTC complaint alleges that, from at least March 2000 to the present, the firms enticed 400 unsophisticated retail customers in the US to invest in managed foreign currency trading accounts by offering substantial profits with little risk.
According to the complaint, after the customers invested their money, the firms fleeced them of their investments in three ways: by using trading strategies that locked in customer losses, imposing commissions and placing restrictions on orders that made profits unlikely, and continuing to trade after customers asked for their accounts to be closed. The complaint alleges that most of the $15 million in customer funds was lost through trading losses, commissions and fees.
The CFTC also alleges that the defendants used inexperienced salespeople who solicited family and friends to invest. It also names Sociedade Comercial Siu Lap Limitada (Siu Lap) of Macao as a relief defendant, and alleges that it unlawfully received more than $4 million of the fraudulently obtained funds from the defendants, and should return it.
The government obtained a court order shortly after the CFTC filed its complaint to freeze the assets of the individuals and companies involved. The CFTC is seeking preliminary and permanent injunctive relief, restitution for customers, disgorgement of ill-gotten gains and civil monetary penalties of up to $120,000 for each violation of the Commodity Exchange Act ($110,000 for each violation occurring before October 23, 2000), or three times the monetary gain to defendants, whichever is the greater.