Release Number 8195-20
CFTC Charges Florida Man for Attempting to Fraudulently Profit From COVID-19
First CFTC Enforcement Action Targeting Misconduct Directly Tied to COVID-19
July 08, 2020
Washington, D.C. — The Commodity Futures Trading Commission today announced it has filed a complaint in the U.S. District Court for the Western District of Texas against James Frederick Walsh of Boca Raton, Florida, charging him with fraudulent solicitation and failure to register with the CFTC. Walsh’s fraudulent solicitations include falsely claiming to generate increased profits as a result of the COVID-19 pandemic. This is the first enforcement action brought by the CFTC alleging misconduct tied directly to the pandemic. The CFTC has also brought additional cases against entities and individuals whose frauds were ongoing during the pandemic. [See CFTC Press Release Nos. 8180-20, 8179-20, 8164-20].
“We continue to actively monitor our markets to seek out bad actors using the COVID-19 crisis as a basis for investment scams,” said CFTC Director of Enforcement James McDonald. “There is never an appropriate time to prey on innocent people’s fears, and we will aggressively pursue those who do.”
The complaint alleges that from at least September 2019 to the present, Walsh fraudulently solicited members of the public for the purported purpose of trading foreign currency (forex) on their behalves. Using primarily social-media platforms, Walsh fraudulently marketed himself to the public as a highly successfully forex trader who earned “average monthly returns of 8% - 11%” or “a flat 3% guaranteed profit each month” for his clients. To achieve these fictitious results, Walsh falsely claimed to have access to “legal, inside information” about the direction in which forex markets will move. As alleged, Walsh has no U.S.-based forex trading accounts.
The complaint further alleges that, after he received a cease and desist letter from the Texas State Securities Board related to his fraudulent solicitations, Walsh falsely represented that he was earning even greater trading profits now that the COVID-19 pandemic had impacted the financial markets, claiming that “the returns in forex continue to grow as the rest of the financial world continues to suffer.”
The CFTC thanks the Texas State Securities Board for its assistance in this matter.
The Division of Enforcement staff members responsible for this case are Tobias Fischer, George Malas, Timothy M. Mulreany, and Paul G. Hayeck.
* * * * * * *
CFTC’s Forex Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Forex Trading Fraud Advisory, to help customers identify these scams.
The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.