For Release: July 3, 2003
CFTC FILES FRAUD CHARGES AGAINST A NORTH CAROLINA FOREIGN CURRENCY TRADER AND HIS FIRM, WHO SOLICITED $1.2 MILLION FROM RETAIL INVESTORS
CFTC Alleges that Defendants James Darren Moore and JDM Investments Concealed Trading Losses of Almost $500,000 by Issuing False Account Statements to Customers
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced that a federal court in North Carolina issued a preliminary injunction against James Darren Moore, a resident of Fairview, North Carolina, and JDM Investments, an Asheville, North Carolina company, in a CFTC enforcement action charging the defendants with fraud. The consent order of preliminary injunction also enjoins the defendants from engaging in conduct that violates the federal commodities laws during the course of the litigation and prohibits the destruction of documents.
The order, issued on July 1, 2003, stems from a CFTC complaint, filed on June 19, 2003, alleging that, from April 2001 to the present, the defendants solicited customers to participate in a commodity pool to trade foreign currency (FOREX) futures contracts. According to the complaint, the defendants claimed to have accepted approximately $1.2 million from more than 50 customers, although, as the complaint further alleges, the defendants deposited only approximately $634,000 in a trading account. Starting in October 2001 and continuing until December 2002, it is alleged that the defendants sustained aggregate trading losses of almost $500,000 and that the defendants hid such losses from their customers by sending false account statements, which showed that the pool was trading profitably.
The complaint also alleges that defendants returned funds to some investors, which were falsely represented to be trading “profits.” In fact, the complaint alleges, the defendants disbursed the purported profits to certain customers in another effort to conceal from investors their substantial trading losses and to further their fraud. As a result of defendants’ repeated misrepresentations, existing customers invested additional funds and new customers were enticed to invest in the pool, the complaint charges.
In its continuing litigation in the United States District Court for the Western District of North Carolina, the CFTC is seeking a permanent injunction against each defendant, the repayment of ill-gotten funds to defrauded customers, the restoration of all ill gotten gains, and an award of civil monetary penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Gretchen L. Lowe, Rick Glaser, and Lenora Kay Majors-Guy.
A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.
Media Case Enforcement Contact:
Gretchen L. Lowe, Associate Director
CFTC Division of Enforcement
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The CFTC Has Issued A Consumer Advisory Warning the Public of the Risks of Foreign Currency (FOREX) Trading and Foreign Currency 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 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 December 2000 (CMFA), 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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