U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES FLORIDA
BUSINESS INTERNATIONAL CURRENCY EXCHANGE, INC. AND ITS
PRINCIPALS WITH $900,000 FOREIGN CURRENCY OPTIONS SCAM
Washington, D.C. – The United States Commodity Futures Trading Commission (CFTC) announced today the filing of an enforcement action in the U.S. District Court for the Southern District of New York against International Currency Exchange, Inc. (ICE), Michael Cottec, John Aucella, Eugene Aucella, and Worldwide Clearing, LLC, alleging fraud in the solicitation of customers to purchase foreign currency (forex) options contracts. The matter has been assigned to the Honorable Richard Casey, U.S. District Court Judge.
The CFTC’s complaint alleges that, between November 2004 and July 2005, ICE, through its employees, knowingly misrepresented and failed to disclose to prospective and existing customers material facts regarding the profitability and risk of trading forex options. The complaint also alleges that, in light of the profits touted, defendants failed to disclose ICE’s poor trading track record: every customer but one lost money trading, for a total loss of at least $900,000. According to the complaint, Cottec, John Aucella and Eugene Aucella are liable for the violations as controlling persons of ICE and aiders and abettors of the fraudulent solicitations.
The complaint further alleges that ICE acted as an agent exclusively for Worldwide Clearing, a registered futures commission merchant, in introducing forex option trading accounts to Worldwide, and consequently, Worldwide is also liable as a principal for ICE’s violations.
Federal Court Freezes Assets of Most Defendants
On October 11, 2005, Judge Casey issued an order freezing the assets of ICE, Cottec, and the Aucellas and prohibiting the destruction of books and records. The CFTC did not seek an asset freeze or a preliminary injunction regarding Worldwide Clearing.
In its ongoing action, the CFTC is seeking, among other things, preliminary and permanent injunctions, repayment of customer losses, and monetary penalties for violations of the Commodity Exchange Act.
The following CFTC Division of Enforcement staff members are responsible for this case: Nancy Gogel, W. Derek Shakabpa, Eliud Ramirez, Ronald A. Carletta, Angelina Guiriba, Manal Sultan, Lenel Hickson, Stephen J. Obie, and Richard Wagner.
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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.
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