Release:#3959-96 (96 CIV 7814)
For Release: October 17, 1996
EX PARTE ORDER ENTERED BY NEW YORK FEDERAL COURT FREEZES ASSETS OF WORLD WIDE CURRENCIES INC., UNITED CURRENCIES, AND A+ CURRENCIES OF NEW YORK
CFTC Complaint Charges Defendants with Cheating and Defrauding Customers and Offering and Selling Illegal Off-Exchange Futures Contracts in Nationwide Scam
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on October 16, 1996, the Honorable Whitman Knapp of the U.S. District Court for the Southern District of New York entered an ex parte restraining order freezing the assets of World Wide Currencies, Inc. (a/k/a Worldwide Currencies, Inc., a/k/a Worldwide Currencies, Ltd.); United Currencies Corp. (a/k/a/ United Currencies, Inc.); and
A+ Currencies Int'l Inc. (d/b/a International Currencies, Inc.), all of New York, New York.
The order stems from a four-count injunctive complaint also filed on October 16, 1996, alleging that the defendants committed fraud in the offer and sale of illegal futures contracts on various foreign currencies (including Japanese yen, the British pound, and the Deutschmark), operated as an unregistered futures commission merchant, and converted customers' funds to personal or business uses.
In addition to freezing the defendants' assets, the court's ex parte order prohibits the destruction of books and records, and grants the CFTC access to such books and records.
Specifically, the complaint charges that since at least January 1995, the defendants violated the anti-fraud provisions of the Commodity Exchange Act (CEA) and the off- exchange futures proscriptions of the CEA through the fraudulent offer and sale of illegal off- exchange commodity futures contracts for various foreign currencies to members of the general public nationwide.
The defendants allegedly cheated and defrauded existing customers and prospective customers by making misrepresentations concerning material facts related to the trading of the contracts, including misrepresenting:
that customer money would be kept in segregated, interest bearing accounts readily available to for customer withdrawal, when in fact such money was deposited in an account maintained under the name of Worldwide Currencies Ltd. and was not available to customers upon request.
The defendants, according to the complaint, solicited prospective customers from across the country using such methods as "cold calling" individuals, placing advertisements in business magazines, running promotional announcements on radio stations, placing advertisements on the internet, and mailing promotional customer response cards containing an 800-toll-free telephone number. The defendants encouraged customers to deposit a minimum amount of money, ranging from $10,000 to $12,500 to open accounts, and most did so, the complaint alleges.
In the continuing litigation against the defendants, the CFTC is seeking preliminary and permanent injunctions prohibiting the defendants from violating Federal commodity law, in addition to other remedial relief, including disgorgement of ill-gotten gains, restitution to defrauded customers, and civil monetary penalties of up to $100,000, or triple the monetary gain to defendants, for each violation of the CEA or regulations.