U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES FLORIDA FOREIGN CURRENCY FIRM PRESIDENTIAL FX, INC. AND TWO EMPLOYEES WITH FRAUD
CFTC Alleges That Firm and Employee Joseph Marchiano Fraudulently Solicited Customers to Trade Foreign Currency Options; Adam León is Charged as a Controlling Person of Presidential
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced the filing of a federal court action against Presidential FX, Inc. (Presidential) located in Hollywood, Florida; Adam León of Hollywood, Florida; and Joseph Marchiano of Pembroke Pines, Florida, charging Presidential and Marchiano with fraudulent solicitation of customers and Leon with acting as a controlling person of Presidential.
The complaint, filed in the United States District Court for the Eastern District of Virginia, alleges that since at least December 2004, defendants Presidential and Marchiano fraudulently solicited retail customers to invest in foreign currency options contracts (forex options) by misrepresenting the likelihood that a customer would realize large profits trading forex options and the risks involved in trading forex options, and failing to disclose Presidential’s poor performance record in trading on behalf of customers in light of the profit representations they made. The complaint alleges that León controlled the operations of Presidential and is responsible for its fraudulent conduct.
According to the complaint, Presidential solicited nearly $1.9 million from at least 120 retail customers. The complaint charges that 97 percent of Presidential’s customers lost all, or almost all, of their investments.
As alleged in the complaint, Marchiano, in soliciting customers, made exaggerated profit claims stating that he would double or triple a customer’s money, give guarantees of profits, and told customers they would make profits within three months. The complaint charges that Marchiano also failed to disclose adequately the risk customers faced in forex options trading by telling customers that it was “absolutely impossible” to lose money investing with Presidential, and that their investment was a “sure thing.” According to the allegations of the complaint, other claims made by Presidential included that customers would make a 20 percent profit within three months, and that customers would see profits of 25 percent, 50 percent, or 100 percent in 60 to 90 days. The defendants solicited customers from across the country, including Virginia.
Subsequently, the court entered a preliminary injunction by consent against all defendants. In consenting to the entry of the injunction, defendants neither admitted nor denied the allegations of the complaint.
In its ongoing litigation, the CFTC is seeking permanent injunctions against the defendants, repayments to defrauded customers, the return of ill-gotten gains and monetary penalties for violating the Commodity Exchange Act.
The following CFTC Division of Enforcement staff members are responsible for this case: William Longwitz, Jason Gizzarelli, Karen Kenmotsu, Gretchen L. Lowe, and Richard Wagner.
* * * * * * * * * * * * * *
The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.
You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enf/enfform.htm).
In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.
# # #