For Release: September 3, 2002
SOUTHERN CALIFORNIA FOREIGN CURRENCY TRADING OPERATORS CHARGED WITH SELLING ILLEGAL FOREIGN CURRENCY (FOREX) FUTURES
CFTC Charges Nawab Ali Khan Ali, Mega Trend 2000, Inc., Sterling FX International LLC, and Roger Barreto, All Operating Out of Glendale, California
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of an enforcement action in federal court in Los Angeles against defendants Nawab Ali Khan Ali (also known as, Nawab Khan or Eric Ali), Mega Trend 2000, Inc. (Mega Trend), Sterling FX International LLC (Sterling FX), and Roger Barreto.
The CFTC complaint, filed on August 20, 2002, alleges that since December 21, 2000, the defendants -- all operating out of Glendale, California -- have solicited and accepted funds from retail investors to engage in speculative trading of illegal, off-exchange foreign currency (FOREX) futures contracts. The CFTC complaint charges that defendants obtained customers by advertising through newspaper employment ads, including in the Los Angeles Times Career Builder Magazine.
On August 23, 2002, the Honorable Percy Anderson of the United States District Court for the Central District of California issued a restraining order against Nawab Ali Khan Ali, Mega Trend 2000, and Sterling FX, freezing their assets and prohibiting the destruction of documents.
According to the complaint, defendant Nawab Ali Kahn Ali allegedly controlled the operations of Mega Trend and Sterling FX; defendant Barreto allegedly managed the daily operations of Mega Trend and of Sterling FX. Also, according to the complaint, Nawab Ali Khan Ali has been associated with numerous companies engaged in illegal FOREX activities, including Noble Wealth Data Information Services, Inc., and Currex International, Inc., which were the subjects of a prior CFTC action in which the United States District Court for the District of Maryland issued an order finding that Noble Wealth and Currex had engaged in fraud and offered illegal futures contracts to the retail public (see CFTC News Release 4389, April 3, 2000).
In its continuing litigation, 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, or triple the monetary gain to defendants, whichever is greater. A hearing on the CFTC’s motion seeking a preliminary injunction is scheduled for September 16, at 1:30 p.m, before Judge Anderson.
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Since December 2000, after the passage of the Commodity Futures Modernization Act of 2000, and including today’s action, the CFTC has brought 17 enforcement actions alleging the sale of illegal foreign currency (FOREX) futures and options (see, e.g., CFTC News Releases 4691-02, August 29, 2002; 4675-02, July 22, 2002; 4652-02, June 10, 2002; 4636-02, May 2, 2002; 4611-02, February 27, 2002; 4513-01, May 2, 2001; 4528-01, June 20, 2001; 4551-01, August 14, 2001; and 4563-01, August 28, 2001).
Investors seeking information on FOREX investments should review the CFTC’s Consumer Advisory on Foreign Currency Fraud listing warning signs of FOREX scams. The CFTC also has issued two Advisories on how FOREX firms may lawfully offer foreign currency futures and options trading opportunities to the retail public (see CFTC Advisory 06-01, February 5, 2001; CFTC Press Release 4625-02, March 21, 2002; and CFTC Advisory, March 21, 2002).
The following Division of Enforcement staff members are responsible for this case: John Wise, Bruce Gale, and Jack Barrett.
A copy of the CFTC complaint and restraining order may be obtained at http://www.cftc.gov.
Media Enforcement Contact:
Western Regional Office
CFTC Division of Enforcement
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