U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES SOUTH FLORIDA FOREIGN EXCHANGE TRADING FIRMS WITH DEFRAUDING CUSTOMERS; COURT FREEZES DEFENDANTS' ASSETS
Worldwide Forex, Inc., Global Atlantic Management, Inc., and A Principal Allegedly Told Customers that the Possibility of War with Iraq Would Result in Significant Profits
WASHINGTON, D.C. - The U.S. Commodity Futures Trading Commission (CFTC) announced today that on June 21, 2004, it filed a two-count enforcement complaint in the U.S. District Court for the Southern District of Florida against Worldwide Forex, Inc. and Global Atlantic Management, Inc of Fort Lauderdale, Florida, and Steven Labell of Plantation, Florida, alleging that defendants fraudulently induced customers to trade foreign currency futures contracts (forex). On June 24, 2004, the Honorable Adalberto Jordan entered a restraining order, freezing the defendants' assets and preventing the destruction or alteration of their books and records.
The CFTC complaint alleges that the defendants solicited customers by exaggerating the likelihood that they would profit from trading forex, including telling customers that the (then) possibility of war with Iraq made it likely that the customers’ trades would result in significant profits. The complaint also charges defendants with failing to adequately disclose the actual risks of trading forex. The complaint also alleges that defendants falsely represented to customers that risks of loss were minimal, while failing to disclose that, from April 2002 to February 2004, approximately 99 percent of customers lost money, with total losses exceeding $1.8 million.
Judge Schedules a Hearing for July 2, 2004
In its continuing litigation, the CFTC is seeking preliminary and permanent injunctive relief, return of funds to defrauded customers, repayment of ill-gotten gains, and an award of monetary penalties. Judge Jordan has scheduled a hearing for July 2, 2004, on the CFTC’s motion for a preliminary injunction.
The following CFTC Division of Enforcement staff members are responsible for this case: Frank Rangoussis, Jed Silversmith, Jan M. Folena, and Richard Glaser.
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Note to Editors:
CFTC Consumer Advisories
Warn Customers to Protect
Themselves from the Many Types of Fraudulent Commodity Scams
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