UNITED STATES COMMODITY FUTURES TRADING COMMISSION CHARGES THREE DEFENDANTS IN FLORIDA AND ONE DEFENDANT IN CALIFORNIA WITH FOREIGN CURRENCY OPTIONS FRAUD
Amended Complaint Alleges the Defendants’ Activities Caused Losses of More than $5.8 Million to at Least 350 Customers
WASHINGTON -- The United States Commodity Futures Trading Commission (CFTC) announced today the filing of an amended complaint charging defendants Graystone Browne Financial, Inc., of Miami, Florida; STG Global Trading, Inc., of Los Angeles, California; QIX, Inc., of North Miami Beach, Florida; and Joseph Arsenault, of Miami Beach, Florida with violating the antifraud provisions of the Commodity Exchange Act in a case already pending before U.S. District Judge Joan Lenard in Miami, Florida.
The pending action, initially filed on June 7, 2004, charged the above-named defendants with the offer and sale of illegal off-exchange foreign currency (forex) transactions, in violation of the Commodity Exchange Act (CEA). The pending action also charged three other defendants, Sterling Trading Group, Inc., Universal FX, Inc., and Andrew Stern, all of North Miami Beach, Florida, with defrauding customers by misrepresenting risk and failing to disclose losses, in violation of the antifraud and other provisions of the CEA. (See CFTC News Release 4946-04, June 29, 2004.)
The CFTC's amended complaint, filed on April 15, 2005, alleges that Graystone and STG Global defrauded customers using misleading sales solicitations materials and aggressive, high-pressure, misleading telemarketing sales tactics to fraudulently solicit retail customers to engage in illegal forex options. The amended complaint further charges Arsenault and QIX with liability for the fraudulent conduct at Graystone and STG Global.
The court previously entered a restraining order against the defendants on June 9, 2004, that ordered books and records of the defendants be preserved, and that required the defendants to provide access to Commission representatives to inspect any such books and records. The CFTC’s motion for preliminary injunctive relief against defendants is pending before the court.
As alleged in the amended complaint, the activities of all the defendants caused losses of more than $5.8 million to at least 350 customers. The amended complaint seeks a permanent injunction, restitution, disgorgement, civil monetary penalties and other equitable relief against each of the defendants.
The following CFTC Division of Enforcement staff members are responsible for this case: Peter M. Haas, Eugene Smith, Kyong J. Koh, and Paul G. Hayeck.
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