FEDERAL COURT ISSUES INTERIM ORDER BARRING FOREIGN FUND, AN INTERNET CURRENCY TRADING FIRM, FROM DEFRAUDING CUSTOMERS, AND ORDERS THE APPOINTMENT OF A TEMPORARY RECEIVER
Court’s Order Continues Asset Freeze against Foreign Fund and Bars the Sale of Illegal Futures Contracts
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on March 8, 2005, the Honorable Robert L. Echols, Chief Judge of the U.S. District Court for the Middle District of Tennessee, issued an order of preliminary injunction against defendant Foreign Fund, a/k/a First Bank, an Internet entity that directed customers to send funds to bank accounts in Nashville, Tennessee and Mountain View, California.
The preliminary injunction order bars Foreign Fund from engaging in fraud and the sale of illegal futures contracts during the pendency of the civil action. In a second order issued the same day, Judge Echols appointed Gilardi and Co., of Larkspur, California as Temporary Receiver to take control of the assets of Foreign Fund.
The court’s order stems from a CFTC complaint filed on October 5, 2004, charging Foreign Fund with commodity fraud by its operation of a Ponzi scheme that fraudulently solicited more than $3 million dollars from thousands of customers throughout the United States and other countries. The complaint further alleges that Foreign Fund falsely claimed it paid customers up to 100 percent per month in profits that were purportedly derived from trading of foreign currency (forex) contracts. In addition, the complaint alleges that Foreign Fund offered illegal off-exchange futures contracts. (See CFTC News Release 5005-04, October 12, 2004.)
According to the court’s order, the Temporary Receiver, Gilardi and Co., will identify and take control of all known assets of Foreign Fund. Pending further orders from the court, Gilardi and Co. also will be responsible for identifying, providing notice to, and communicating with Foreign Fund customers. Gilardi and Co. will establish a web site at www.f-fundlitigation.com to communicate with the customers of Foreign Fund and to the extent necessary or feasible, process their claims. Interested customers may also contact Gilardi and Co. at 800-705-0698.
In its ongoing litigation, the CFTC is seeking a permanent injunction against Foreign Fund and the other defendants named in the case, repayment to defrauded customers, the return of ill-gotten gains from the defendants, and civil monetary penalties for each violation of the Commodity Exchange Act and CFTC regulations.
The following CFTC Division of Enforcement staff members are responsible for this case: Michael Amakor, Patricia Gomersall, Lael Campbell, Todd Kelly, Grant Collins, Paul Hayeck, and Joan Manley.
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