FEDERAL COURT ISSUES ORDER FREEZING ASSETS OF FLORIDA FOREIGN CURRENCY TRADING FIRM AND ITS VICE-PRESIDENT; BOTH CHARGED WITH FRAUD
U.S. Commodity Futures Trading Commission Charges Defendants G7 Advisory Services, LLC and Michel Geraud With Fraudulently Soliciting Customers to Trade Foreign Currency Options
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on April 12, 2005, a federal court in Florida entered a statutory restraining order against defendants G7 Advisory Services, LLC of Boca Raton, Florida, and Michel Geraud, also known as Mike Jeraux, of Pompano Beach, Florida, freezing their assets and preventing the destruction or alteration of the firms books and records.
The court’s order arises from a complaint filed the same day by the CFTC, which alleges that since at least May 2004, defendants have fraudulently solicited customers by telephone and through the website www.g7options.com, among other means, to trade foreign currency options.
According to the complaint, G7 Advisory provides its brokers with a sales script entitled Currency Sales Success-the Complete Guide to Selling Currency Investments Around the World to use when soliciting customer to invest. As alleged, the script instructs brokers to stress the urgency of investing immediately, to portray an investment with G7 Advisory as highly rewarding with little risk, and to convey the image that G7 Advisory's traders are experienced and successful.
However, according to the complaint, the defendants in fact misrepresent and/or fail to disclose the likelihood of profits and the risks of trading foreign currency options, as well as the trading experience of their brokers. The complaint alleges that, despite making glowing profit representations and minimizing the risk involved, defendants fail to disclose to potential customers that the firm has an abysmal track record: 100% of G7 Advisory customers lost money since the firm opened for business.
The Honorable William P. Dimitrouleas of the U.S. District Court for the Southern District of Florida ordered a hearing on the CFTC’s motion for a preliminary injunction to take place on April 21, 2005.
In its ongoing litigation, the CFTC is seeking a permanent injunction against the defendants, repayment of defrauded customers, the return of ill-gotten gains, and monetary penalties for violating the Commodity Exchange Act.
The CFTC appreciates the assistance of the Broward County Sheriff’s Office, Strategic Investigations Division, the Boca Raton Police Department, and the Florida Department of Agriculture and Consumer Services in this matter.
The following CFTC Division of Enforcement staff members are responsible for this case: Rachel Entman, Lacey Dingman, Jason Gizzarelli, Gretchen L. Lowe, and Richard Wagner.
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