Release Number 8393-21
Federal Court Orders Florida Man to Pay More than $500,000 for Attempting to Fraudulently Profit From COVID-19
CFTC Wins Its First Enforcement Action Targeting Misconduct Directly Tied to COVID-19
June 03, 2021
Washington, D.C. — The Commodity Futures Trading Commission today announced that the U.S. District Court for the Western District of Texas entered an order granting the CFTC’s motion for default judgment against defendant James Frederick Walsh of Boca Raton, Florida. The order finds that Walsh failed to answer the CFTC’s complaint charging him with fraud and failure to register with the CFTC. Walsh’s fraudulent solicitations include falsely claiming to generate increased forex trading profits as a result of the COVID-19 pandemic. This was the first enforcement action brought by the CFTC alleging misconduct tied directly to the COVID-19 pandemic.
The order requires Walsh to pay a civil monetary penalty of $555,726 and permanently enjoins him from engaging in conduct that violates the Commodity Exchange Act, from registering with the CFTC, and from trading in any CFTC-regulated markets.
The complaint alleged that from at least September 2019 to the July 2020, Walsh fraudulently solicited members of the public for the purported purpose of trading retail 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 had no U.S.-based forex trading accounts.
The complaint further alleged 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.
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CFTC’s Forex Fraud Advisory
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), file a tip or complaint online, or contact the . Whistleblowers are eligible to receive between 10% and 30% of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the Commodity Exchange Act.