Release Number 8446-21
CFTC Charges North Carolina Companies and Their Owners in $1 Million Foreign Currency Fraud and Misappropriation Scheme
Federal Court Issues Restraining Order Against Defendants Freezing Assets and Preserving Records
October 08, 2021
Washington, D.C. — The Commodity Futures Trading Commission announced today that it filed a civil enforcement action in the U.S. District Court for the Western District of North Carolina, charging defendants Storm Bryant and Elijah Bryant, III of Los Angeles, California and CapitalStorm, LLC, GenerationBlack, LLC and NCome, LLC, all North Carolina limited liability companies, with fraudulent solicitation, misappropriation and registration violations relating to a $1.05 million fraudulent scheme operated by the Bryants through their corporate entities.
On September 24, 2021, the court issued an ex parte order freezing assets controlled by the defendants and preserving records. A hearing on the CFTC’s Motion for Preliminary Injunction is scheduled for October 8, 2021.
In its continuing litigation, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act (CEA) and CFTC Regulations.
The complaint charges that from approximately March 2018 through the present, Storm Bryant and Elijah Bryant III, individually and through CapitalStorm LLC, Generationblack LLC, and Ncome LLC, have fraudulently solicited, and continue to fraudulently solicit, existing and prospective clients who are not eligible contract participants (ECPs) to engage in retail transactions in off-exchange foreign currency (forex) on a leveraged, margined, or financed basis. The defendants received approximately $1.05 million from approximately 94 clients during the relevant period, all of which the defendants misappropriated. Approximately $50,870 was sent back to clients as purported forex trading “profits” in the nature of a Ponzi scheme.
Capital Storm, Generation Black, and Ncome, without registering with the CFTC as commodity trading advisors (CTA), and Storm and Elijah Bryant, without registering as associated persons of a CTA, respectively, solicited and continue to solicit clients or prospective clients through in-person solicitations as well as social media platforms such as Facebook and Instagram, including a website operated by Storm and Elijah Bryant, to induce non-ECP, retail clients to send the defendants funds. Storm and Elijah Bryant, both individually and as agents of Capital Storm, Generation Black, and/or Ncome, describes themselves as highly successful forex traders who generate tremendous returns for their clients. When the Bryants successfully induced non-ECP, retail clients to send them funds, the Bryants misappropriated the funds by receiving them or moving them into accounts held by Storm and/or Elijah Bryant in their own names and using the funds to purchase jewelry, rent homes, European travel, and fund the Bryants’ personal trading accounts.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost, because the wrongdoers may not have sufficient funds or assets.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Western District of North Carolina and the North Carolina Office of the Secretary of State, Securities Division.
CFTC Division of Enforcement staff members responsible for this case are Timothy J. Mulreany, George H. Malas, Hillary Van Tassel, and Paul G. Hayeck.
CFTC’s Commodity Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify this sort of scam.
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 or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions and paid to the CFTC by violators of the CEA.