For Release: January 23, 2003
WORLD-WIDE CURRENCY SERVICES CORP. AND OTHERS CHARGED WITH DEFRAUDING CUSTOMERS IN CURRENCY SCAM
CFTC Also Charges World-Wide Director Gennady (George) Spivak and Salesman Ellison Ken Morris with Defrauding Customers in Foreign Currency (FOREX) Futures Trading, Misappropriating Customer Funds, and Operating an Illegal FOREX Futures Business
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of an enforcement action in federal court on January 14, 2003, against a Florida firm and two of its principals, charging them with fraudulently soliciting customers to invest in illegal, off-exchange foreign currency (FOREX) futures contracts and options on these contracts, as well as in other futures contracts, and misappropriating at least $767,000 of customer funds.
Named in the CFTC complaint are: World-Wide Currency Services Corp (World-Wide) of Palm Beach, Florida; Gennady (aka George) Spivak of Jupiter, Florida, a director of World-Wide; and World-Wide salesman Ellison Kent Morris of Palm Beach.
CFTC Alleges Defendants Enticed Investors With False Claims of Quick and Substantial Profits
The CFTC complaint charges that, since at least December 21, 2000, defendants fraudulently offered and/or sold foreign currency futures contracts under the guise of selling spot currencies. As alleged, World-Wide and Morris lured customers into investing in foreign currency futures contracts using aggressive telemarketing tactics and boasts of large profits to be made in a short period of time, usually with little or no risk.
The complaint also alleges that the defendants rarely used the customers’ money to purchase any currency futures or options contracts. Instead, they allegedly misappropriated virtually all the funds they solicited -- approximately $767,000 -- for defendants’ personal uses. Defendants are charged with fraud in soliciting customer funds, misappropriating those funds, misrepresenting and failing to disclose the risk of loss, and failing to disclose that customer funds were misappropriated.
In its continuing litigation, the CFTC is seeking preliminary and permanent injunctive relief, restitution for defrauded customers, disgorgement of ill-gotten gains, and civil monetary penalties of $120,000 or triple the monetary gain, whichever is greater, against each defendant for each violation of the Commodity Exchange Act.
The CFTC appreciates the assistance of the Broward County Sheriff’s Office, the Florida State Comptroller’s Office, and the Broward County State Attorney’s Office in this matter.
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: Paul Hayeck, Robert J. Hildum, Karon J. Powell, Timothy J. Mulreany, and Charles A. Ricci.
A copy of the CFTC complaint and restraining order may be obtained at www. cftc.gov.
Media Enforcement Contact:
Paul Hayeck, Associate Director
CFTC Division of Enforcement
(202) 418- 5312
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