Tue, May 26, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque Futures Intelligence

Regulators: Recent foreign exchange-related fraud cases: defendants include a pastor and an ex con.

Monday, September 20, 2010

Regulator Focus on Forex Continues

This month the Commodity Futures Trading Commission announced a new development in a series of enforcement actions against fraud related to foreign exchange trading. The regulator has been going after forex schemes since 2009.

The latest is a summary judgment in a federal court against Marvin Cooper and his company, Billion Coupons, of Honolulu, Hawaii. According to the CFTC, Mr. Cooper operated a $4 million foreign currency and commodity futures Ponzi scheme that defrauded more than 125 customers, prying in particular on the deaf.

He solicited money from deaf American and Japanese individuals, with promises of 15% to 25% monthly returns from trading forex, the regulator alleges. He is also accused of misappropriating customers' funds for personal use, including payments for flying lessons and a $1 million house. Mr. Cooper is himself deaf.

The court ordered him and Billion Coupons to pay $6.2 million in disgorgement and civil penalties.

Pastor Accused of Scheme

Another alleged forex scheme emerged in August. The CFTC obtained an emergency court order freezing assets held by Jeremiah Yancy of Atoka, Oklahoma, and his company, Longbranch Group International LLC of Houston, Texas. The court order also granted the CFTC immediate access to the defendants' books and records.
Mr. Yancy allegedly operated a Ponzi scheme claiming to invest in off-exchange foreign currency contracts and solicited more than $1 million from at least 36 people, including members of the church in which he was pastor. He told potential customers that he managed forex trading for non-profit organizations, including churches and orphanages.
According to the complaint, he promised prospective customers monthly returns of 20% to 40% from forex trading and falsely told some of them that their principal would be guaranteed.

In addition, he sent account statements from demonstration forex trading accounts showing high returns from accounts supposedly containing up to $10 million traded by him and the company, without telling the customers that these accounts were for demonstration and did not represent actual trading.

Ex Con Ran CTA-CPO

In late July the CFTC charged Robert Mihailovich Sr. and Growth Capital Management LLC of Rockwall, Texas, with fraudulent solicitation in connection with commodity futures contracts and leveraged foreign currency trading. He is a felon who was on supervised release while he was soliciting for and operating Growth Capital.

Growth Capital is a registered commodity trading adviser and commodity pool operator under the name of Mr. Mihailovich's son, Robert Mihailovich Jr. The latter is accused of making false statements in regulatory filings because he failed to disclose that his father was a controlling principal of the CTA-CPO.

The regulator says that since at least June 2008 Growth Capital and Mihailovich Sr. fraudulently solicited and accepted more than $30 million from around 93 customers, to invest in futures and forex through discretionary accounts. Mihailovich Sr. made false representations claiming to be a successful commodity futures trader with no losing trades.

Moreover, he failed to disclose to customers that he had a federal felony conviction for mail fraud, had served 27 months in prison and was on a three-year supervised release.



 



 
This article was published in Opalesque Futures Intelligence.
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Comment - Top hedge fund managers talk about how easy their jobs have gotten, BlackRock to Schroders warn of Argentina’s $20bn bond glut, The 35-year “investment supercycle” is drawing to a close, says Bill Gross, Gundlach: When the Fed starts hiking rates, 'GET OUT' of this asset class[more]

    Top hedge fund managers talk about how easy their jobs have gotten From Businessinsider.com.au: Time was, before the financial crisis hit, corporate boards treated multi-billion dollar hedge fund managers like Jehovah’s Witnesses pounding on their doors and flashing bibles. But no more.

  2. T Rowe's challenge to Dell deal may fuel critics of 'appraisal'[more]

    From Reuters.com: An increasingly popular tactic used by hedge funds and others to extract more money from buyouts could soon face a major courtroom test when a big investor in Dell Inc may argue that it should be paid a higher price for the 2013 acquisition of the PC maker. The strategy, known as "

  3. News Briefs - Ergen says LightSquared plan unfairly favors hedge funds, Why hedge fund managers make good advisory clients, I learned a lot about dad-bros after spending 4 days in Vegas with 2,000 hedge funders[more]

    Ergen says LightSquared plan unfairly favors hedge funds LightSquared Inc.’s bankruptcy plan gives hedge funds that invested in the broadband company a leg up while blocking telecommunications firms from competing with it, a fund owned by Dish Network Corp. Chairman Charles Ergen said in

  4. Opalesque Exclusive: SEC approves proposed changes to Form ADV, '40 Act - comment period to follow[more]

    Bailey McCann, Opalesque New York: Hedge funds and providers of liquid alternatives will want to pay close attention to proposed reforms approved by the SEC yesterday. The changes will require more frequent reporting, as well as a closer look into social media, liquid alternative strategies, and

  5. Opalesque Exclusive: Ovation Partners targets opportunities where few "natural lenders" participate[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Changes in financial regulations post-2008 (Dodd-Frank and Basel III) are forcing banks to significantly alter their core lending businesses. And as mid-sized

banner