FEDERAL COURT ORDERS INTERNATIONAL FINANCIAL SERVICES AND OTHERS TO PAY MORE THAN $100 MILLION IN RESTITUTION AND PENALTIES IN FOREIGN CURRENCY FUTURES FRAUD ACTION
Federal Court Finds All Defendants Liable for Fraud and Illegal Sale of Foreign Currency Futures Contracts
Washington, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today that U.S. District Court Judge Gerard E. Lynch of the Southern District of New York entered an order of final judgment against defendants International Financial Services (New York) LLC (IFS LLC), International Financial Services (New York) Inc. (IFS Inc.), John Walker Robinson, and Chan Kow Lai a/k/a Wilson Lai, and Relief Defendant Sociedade Comercial Siu Lap Limitada (Siu Lap), requiring them to pay more than $100 million in restitution and penalties for their violations of federal commodity laws.
The court’s May 28, 2004, order of final judgment concludes an action brought by the Commission in July 2002 (see CFTC News Release 4675-02, July 22, 2002). In a related opinion and order dated May 6, 2004, the court found that defendants committed fraud by routinely misleading and lying to customers about the prospect for profits and the status of their accounts, and made it virtually impossible for customers to make money in their accounts. In noting that some unlucky customers lost virtually their entire life savings, the court held that the defendant IFS, Inc. "rigged the market to ensure that, with few exceptions, customers would lose their money to [IFS, Inc.]," and that "every dollar that was lost by a customer was a dollar gained by [the defendants].” The court found that defendants Robinson and Lai were personally liable for the wrongdoing. Furthermore, the court held that the foreign currency (forex) transactions at issue were futures contracts under the Commission’s jurisdiction.
CFTC Chairman James E. Newsome said, “This decision strongly reinforces the Commission’s ability to effectively fight foreign currency fraud affecting members of the general public, fulfilling one of our primary missions.”
“The Division of Enforcement puts a high priority on pursuing the perpetrators of forex fraud, and will continue to track it down and root it out," said Gregory Mocek, Director of the Enforcement Division.
The following CFTC Division of Enforcement staff were responsible for this case: Christina Kang, Linda Peng, Steven Ringer, Eliud Ramirez, Jr., Judith Slowly, John Cipriani, Lenel Hickson, and Stephen Obie.
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