CFTC Secures $102 Million Penalties in Forex Scandal

CFTC Secures $102 Million Penalties in Forex Scandal

Time Stamp: December 20, 2023 12:39 PM
Source Node: 3028095

The Commodity Futures Trading Commission (CFTC) announced that Judge Carlos E. Mendoza of the U.S. District Court for the Middle District of Florida has issued a default judgment against Avinash Singh and his company, Highrise Advantage, LLC. The judgment grants a permanent injunction and imposes monetary sanctions in connection with a multi-level, multi-million dollar off-exchange foreign currency (forex) scheme.

The civil enforcement action, initiated by the CFTC on September 9, 2020, targeted Singh, Highrise, and eight other defendants. The court's order resolves the case, finding that Singh fraudulently solicited and misappropriated funds through master commodity pool Highrise and four feeder commodity pools. Singh and Highrise also failed to register with the CFTC as required, violating regulatory requirements related to operating commodity pools.

The default judgment and permanent injunction prohibit Singh and Highrise from engaging in conduct that violates the Commodity Exchange Act and CFTC regulations. Furthermore, they are ordered to pay $25,558,594 in restitution and $76,675,782 in civil monetary penalties. The court also permanently bans Singh and Highrise from registering with the CFTC and participating in trading on any registered entity.

The court's order reveals that Highrise and Singh collected nearly $58 million from investors and feeder funds. However, less than $2.5 million was used for actual forex trading, with over $25 million misappropriated. Investor funds were utilized for Ponzi-type payments and personal expenses, while false statements showing profits and no losses were sent to investors and feeder funds.

Notably, on July 5, 2023, the court entered consent orders against the operators of the four feeder commodity pools—SR&B Investment Enterprises, Inc., Green Knight Investments, LLC, Bull Run Advantage, LLC, and King Royalty, LLC. These consent orders resolve the litigation fully.

Ponzi Scheme Fallout: Galles Entities Slapped with $20 Million Fine

Finance Magnates previously reported that a federal court has ruled for Phillip Galles and his entities, including Tyche Asset Management LLC, to pay over $20 million for orchestrating a Ponzi scheme within the commodity pool sector. The court's decision, as covered by Finance Magnates, found Galles liable for defrauding investors, diverting funds for personal use, and making false claims of extraordinary returns.

The CFTC found Galles liable for defrauding investors, diverting funds for personal use, and making false claims of extraordinary returns. The court's decision imposes a substantial financial penalty and enforces a permanent trading ban on regulated markets to prevent future violations. The CFTC issued a cautionary note that repayment orders may not guarantee the recovery of lost funds.

The Commodity Futures Trading Commission (CFTC) announced that Judge Carlos E. Mendoza of the U.S. District Court for the Middle District of Florida has issued a default judgment against Avinash Singh and his company, Highrise Advantage, LLC. The judgment grants a permanent injunction and imposes monetary sanctions in connection with a multi-level, multi-million dollar off-exchange foreign currency (forex) scheme.

The civil enforcement action, initiated by the CFTC on September 9, 2020, targeted Singh, Highrise, and eight other defendants. The court's order resolves the case, finding that Singh fraudulently solicited and misappropriated funds through master commodity pool Highrise and four feeder commodity pools. Singh and Highrise also failed to register with the CFTC as required, violating regulatory requirements related to operating commodity pools.

The default judgment and permanent injunction prohibit Singh and Highrise from engaging in conduct that violates the Commodity Exchange Act and CFTC regulations. Furthermore, they are ordered to pay $25,558,594 in restitution and $76,675,782 in civil monetary penalties. The court also permanently bans Singh and Highrise from registering with the CFTC and participating in trading on any registered entity.

The court's order reveals that Highrise and Singh collected nearly $58 million from investors and feeder funds. However, less than $2.5 million was used for actual forex trading, with over $25 million misappropriated. Investor funds were utilized for Ponzi-type payments and personal expenses, while false statements showing profits and no losses were sent to investors and feeder funds.

Notably, on July 5, 2023, the court entered consent orders against the operators of the four feeder commodity pools—SR&B Investment Enterprises, Inc., Green Knight Investments, LLC, Bull Run Advantage, LLC, and King Royalty, LLC. These consent orders resolve the litigation fully.

Ponzi Scheme Fallout: Galles Entities Slapped with $20 Million Fine

Finance Magnates previously reported that a federal court has ruled for Phillip Galles and his entities, including Tyche Asset Management LLC, to pay over $20 million for orchestrating a Ponzi scheme within the commodity pool sector. The court's decision, as covered by Finance Magnates, found Galles liable for defrauding investors, diverting funds for personal use, and making false claims of extraordinary returns.

The CFTC found Galles liable for defrauding investors, diverting funds for personal use, and making false claims of extraordinary returns. The court's decision imposes a substantial financial penalty and enforces a permanent trading ban on regulated markets to prevent future violations. The CFTC issued a cautionary note that repayment orders may not guarantee the recovery of lost funds.

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