For Release: October 23, 2003
COMMODITY FUTURES TRADING COMMISSION CHARGES FLORIDA FOREIGN CURRENCY FIRM AND OFFICERS WITH DEFRAUDING INVESTORS
Commodity Futures Trading Commission Alleges that Defendants Bibas Levy Corp., Zacarias Bibas, and Hassan Sharam Made False Profit Claims, Misrepresented Their Performance Record and Minimized Risks of Foreign Currency Futures Trading
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today that a federal court in Florida issued a restraining order on October 20, 2003 against Bibas Levy, Corp., a Miami, Florida company, Zacarias Bibas, a resident of Coral Gables, and Hassan Sharam, a resident of Miami, in a CFTC enforcement action. The restraining order freezes the defendants’ assets and prohibits the defendants from engaging in conduct that violates federal commodities laws. The order arises from a CFTC complaint filed on October 7, 2003, alleging that defendants, by telephone and through their Internet website, fraudulently solicited the retail public to enter into foreign currency futures contracts (forex).
The complaint alleges that starting in February 2003, defendants solicited customers by claiming that customers could make large profits in a short period of time with minimal risk trading Euros, British Pounds Sterling, Japanese Yen, and Swiss Francs, and that Bibas Levy had successfully traded currencies on behalf of customers, when, in fact, as the complaint charges, defendants’ trading resulted in losses of approximately $346,000 to customers. According to the complaint, the defendants claimed, among other statements, that their customers should expect to make annual rates of return of over 20 percent, and that it was very easy to make money trading in forex.
According to the complaint, defendants told prospective customers that stop-loss orders would be used on “every trade,” which would help protect customer funds, when, in fact, defendants rarely used stop-loss orders. The complaint alleges that defendants offered false reassurances to at least one customer that, through the use of stop-loss orders, the customer’s losses would be limited to 2.5 to 3 percent. As charged, defendants also misrepresented that Bibas Levy customers had doubled their profits in a single month, failing to disclose that Bibas Levy’s trading had instead suffered losses. The complaint alleges that as a result of defendants’ repeated misrepresentations, new customers were enticed to invest with defendants, and existing customers were convinced to continue to rely on defendants for profitable trades, even after discovering they had sustained losses.
The CFTC complaint seeks to enjoin defendants from violating federal commodity laws, demands a return of funds for defrauded customers and the repayment of ill-gotten gains, along with civil penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Gretchen L. Lowe, Elizabeth Chandler, Karen Kenmotsu, Lawrence Green, and Lenora Kay Majors-Guy. The State of Florida, Department of Financial Services, Office of Financial Institutions and Securities Regulation in Miami, Florida also assisted the CFTC staff in this investigation.
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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