Release Number 5429-07
For Release: December 28, 2007
CFTC Forex Boiler Room Fraud Action Nets $3.4 Million in Sanctions Against “Richmond Global” and Vincent Danio
Defrauded Customers Lost More Than $1.7 Million Trading Forex
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) was awarded a default judgment order against Richmond Global Associates, LLC; Richmond Global Director, LLC; Richmond Global MCA, LLC; Richmond Global Managed Account, LLC; Richmond Global, Ltd.; RG Group Holdings, LLC (collectively the Richmond Global Entities); and Vincent Danio of Staten Island, New York, finding that they fraudulently operated a foreign currency (forex) boiler room and ordering them to pay more than $3.4 million in sanctions.
The order holds the Richmond Global Entities and Danio jointly liable for $1,788,580 in restitution to defrauded customers and imposes civil monetary penalties against each of the six Richmond Global Entities and Danio in the amount of $240,000 for a total of $1,680,000. Finally, the order permanently prohibits the defendants from engaging, directly or indirectly, in any business activities related to commodity trading.
The order, which was entered by the Honorable Shira A. Scheindlin of the United States District Court for the Southern District of New York, stems from a complaint filed by the CFTC in February 2005 (see CFTC Press Release 5050-05, February 18, 2005). The complaint alleged that from December 2001 the defendants fraudulently solicited investments from at least 160 retail customers in forex contracts. During those solicitations, the defendants made false promises of high returns, failed to disclose hidden commission charges, issued account statements that falsely characterized the undisclosed commissions as trading losses, made false representations regarding the risk of forex trading as well as their experience and past performance in trading forex, and misappropriated customer funds.
In April 2007, the court granted the CFTC’s summary judgment motion and ordered penalties, including more than $2 million in monetary sanctions, against Joseph Pappalardo, Ronald Turner, and Miron Vinokur, other Richmond Global Entities principals and employees (see CFTC Press Release, 5336-07, May 17, 2007).
The CFTC’s injunctive action is the result of a cooperative civil and criminal investigation by the CFTC, the U.S. Attorney’s Office for the Southern District of New York, and the Federal Bureau of Investigation.
The following CFTC staff members are responsible for this case: Karin N. Roth, David W. MacGregor, Lenel Hickson, Jr., Stephen J. Obie, and Vincent McGonagle.
Last Updated: December 27, 2007