U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES CALIFORNIA MAN AND HIS COMPANY WITH DEFRAUDING CUSTOMERS
James J. Zhou and Jade Trader Allegedly Fraudulently Solicited Customers to Trade Commodity Futures Contracts
WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today that it filed a complaint in the U.S. District Court for the Central District of California charging that Jade Trader and its director and owner, James J. Zhou, both of Alhambra, California, fraudulently induced clients to purchase commodity futures contracts.
The CFTC complaint, filed on October 1, 2004, alleges that since October 11, 2002, Jade Trader and Zhou fraudulently solicited customers to trade approximately $200,000 in commodity futures contracts through accounts that the defendants managed. Jade Trader posted trading results on its website that falsely represented that its customers were making money when, in fact, customers were losing money, according to the complaint. The complaint also alleges that the defendants made false representations to customers regarding how their accounts would be traded and the risk involved with trading commodity futures contracts.
The complaint further alleges that the defendants should have been registered with the CFTC and that Jade Trader failed to provide disclosure documents to customers as required by CFTC regulations.
The CFTC complaint seeks an order of permanent injunction prohibiting defendants from violating the commodity laws, operating their fraudulent website, and trading commodity futures contracts. The complaint further seeks a return of funds to defrauded customers, disgorgement of the defendants’ ill-gotten gains, and civil monetary penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Lacey Dingman, and Jan Folena.
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