For Release: April 8, 2003
NEW YORK FOREIGN CURRENCY (FOREX) FIRM CHARGED WITH DEFRAUDING 230 INVESTORS OF $6.4 MILLION
CFTC Charges Holston, Young, Parker & Associates, Conetto Holding Company, Ltd, and Holsten’s President With Commodity Scam Using Offshore Banks
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that a federal district court judge in New York, acting on a CFTC complaint filed on March 14, 2003, issued an order freezing the assets and preventing the destruction of the books and records of defendants Holston, Young, Parker & Associates (Holston) of New York City, Conetto Holding Company, Ltd (Conetto) (a purported U.K. company doing business at Holston’s address), and Aleksander Aizen, President of Holston, of Forest Hills, New York.
Holston, Conetto, and Aizen were charged with fraud in soliciting retail customers to trade foreign currency (FOREX) futures, making false statements, and misappropriating customer funds. The CFTC also charged the defendants with trading illegal, off-exchange FOREX futures contracts.
Specifically, the complaint alleges that, since at least May 2002, Holston, Conetto, and Aizen defrauded approximately 230 retail investors of $6.4 million by offering them opportunities to speculate in the value of foreign currencies. According to the complaint, defendants’ solicitations contained materially misleading statements about the parties and the risks inherent in trading commodity futures.
The complaint also alleges that the defendants issued false bi-weekly account statements reflecting modest profits on the investments as a way to lull customers, when in fact no trading was occurring. The complaint charges that instead of trading customer funds, the defendants immediately sent the funds offshore to banks located in Cyprus and elsewhere, and misappropriated the customers’ funds.
Gregory Mocek, the CFTC’s Director of Enforcement, noted:
“The law prohibiting the illegal sale of off-exchange foreign currency futures contracts is clear. That law is supported by the force of the CFTC’s Division of Enforcement. As evidenced by this action, we will hunt down corruption and prosecute, even when funds are moved offshore.”
The CFTC is seeking a permanent injunction against each defendant, repayments to defrauded customers, return of all ill-gotten gains, and civil monetary penalties for each violation of the Commodity Exchange Act.
The following CFTC Division of Enforcement staff members are responsible for this case: Vincent B. Johnson, William P. Janulis, Michael Tallarico, Frank D. Ferarra, Scott R. Williamson, Rosemary Hollinger, and Joan Manley.
A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.
Media Case Enforcement Contact:
Associate Director and Regional Counsel
CFTC Division of Enforcement
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The CFTC Has Issued A Consumer Advisory Warning the Public of the Risks of Foreign Currency Trading and Foreign Currency (FOREX) Scams
The CFTC has issued a Consumer Advisory (at www.cftc.gov/cftc/cftccustomer.htm) urging the public to scrutinize claims of high-return, low-risk investment opportunities in foreign currency (FOREX) trading. This Consumer Advisory provides "red flags" to look for, and cautionary steps to be taken before making an investment. The CFTC has also issued Advisories concerning the Commodity Futures Modernization Act of 2000, and how FOREX firms may lawfully offer foreign currency futures and options trading opportunities to the retail public (see CFTC Press Release 4625-02, March 21, 2002, CFTC Advisory, March 21, 2002, and CFTC Advisory 06-01, February 5, 2001).
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