For Release: September 13, 2002
ATLANTA INVESTMENT FIRM AND ITS CHIEF EXECUTIVE OFFICER CHARGED WITH SOLICITING OVER $400,000 FROM CUSTOMERS TO INVEST IN ILLEGAL FOREIGN CURRENCY (FOREX) FUTURES CONTRACTS
Government Obtains Federal Court Order Preventing Defendants from Offering Illegal FOREX Contracts and Freezing Assets of Defendants Advent Capital Partners, Ltd. and Samuel Daley
WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) announced today the filing of a civil injunctive action in federal court in Atlanta, Georgia, against Advent Capital Partners, Ltd. (Advent) of Atlanta, Georgia, and Samuel Daley of Lithonia, Georgia, charging them with illegally offering investments in foreign currency (FOREX) futures contracts to retail investors. On June 4, 2002, the Honorable Richard W. Story of the United States District Court for the Northern District of Georgia issued a preliminary injunction order prohibiting defendants from offering illegal FOREX contracts, freezing the assets of the defendants, and prohibiting the destruction of documents.
The CFTC complaint was filed under seal on May 21, 2002, and the court lifted the seal on September 12, 2002. The CFTC complaint alleges that, since at least December 21, 2000, the defendants successfully solicited funds from investors to engage in speculative trading of what defendants falsely claimed were “spot” FOREX contracts (meaning contracts for the delivery of the underlying foreign currency). The CFTC alleges that defendants engaged in the trading of illegal, off-exchange futures contracts, which, under federal commodities laws, cannot be offered or sold to retail investors.
The CFTC’s Division of Enforcement Director, Gregory Mocek, said:
The sale of illegal FOREX futures contracts is a recurring scam that we have pursued nationwide over the past year. The CFTC’s team of highly skilled trial attorneys and investigators will continue to prosecute these cases in order to protect the retail public and unmask the illusion that firms like Advent are actually selling foreign currency in the spot market.
According to the complaint, although Advent was sending account statements to customers showing that their accounts have been increasing in value, Advent customers recently have not been able to contact any brokers or traders at Advent, and Advent sent checks to at least two customers that were returned by Advent’s bank due to insufficient funds in Advent’s accounts. It appears that Advent has shut its offices. The CFTC complaint alleges that customers’ investments with Advent total over $400,000.
In its continuing litigation, the CFTC is seeking permanent injunctive relief, restitution for customers, disgorgement of ill-gotten gains, and civil monetary penalties of up to $120,000 for each violation or triple the monetary gain to defendants, whichever is greater, for each violation of the Commodity Exchange Act. The court has not set a date for the permanent injunction hearing.
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Over the past year, the CFTC has brought 18 enforcement actions alleging the sale of
illegal foreign currency futures and options (see, e.g., CFTC News
Releases 4693-02, September 3, 2002; 4692-02, September 3, 2002; 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 is responsible for this case: Richard Wagner, Karen Kenmotsu, Eugene Smith, Rick Glaser, and Michael Jones.
A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.
CFTC Division of Enforcement
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