For Release: April 29, 2003
CFTC CHARGES ST. PETERSBURG, FLORIDA, COMPANY AND RESIDENT WITH DEFRAUDING CUSTOMERS IN FOREIGN CURRENCY (FOREX) OPTIONS SCAM
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today the recent filing of an enforcement action in federal court in Tampa, Florida against Phoenix Global Trading, Inc. (Phoenix), a Florida corporation located in St. Petersburg, Florida, and Keith Elsesser, also of St. Petersburg. The CFTC charged Phoenix and Elsesser, its principal, with fraudulently soliciting customers to invest in illegal, off-exchange options on foreign currency contracts and with misappropriating customer funds.
CFTC Complaint Charges that Defendants Sold Illegal Options on FOREX Contracts
The CFTC complaint charges that, since at least September 2001, defendants fraudulently offered and/or sold illegal options on foreign currency (FOREX) contracts to customers. The complaint also alleges that the defendants never used the customers’ money to purchase any options contracts, as they had represented. Instead, they allegedly misappropriated virtually all the funds they solicited – approximately $72,000 -- for defendants’ business and personal uses.
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 Has Issued A Consumer Advisory on FOREX Fraud
Investors seeking information on foreign currency investments should review the CFTC’s Consumer Advisory on Foreign Currency Fraud (at www.cftc.gov/cftc/cftccustomer.htm), 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 News Release 4625-02, March 21, 2002; CFTC Advisory, March 21, 2002; and CFTC Advisory 06-01, February 5, 2001).
The following CFTC Division of Enforcement staff members are responsible for this case: Rosemary Hollinger, Robert Greenwald, Mark Bretscher, and Ken Hampton.
A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.
CFTC Media Enforcement Contact:
Rosemary Hollinger, Associate Director
CFTC Division of Enforcement
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