Release Number 8477-21
CFTC Charges New Jersey-Based Entities and Individuals With Multi-Million Dollar Forex Fraud
December 28, 2021
“This complaint underscores the critical importance of the CFTC’s registration requirements and that market participants comply with applicable customer protection regulations,” said Acting Director of Enforcement Vincent McGonagle. “It should come as no surprise that a company that avoided a requirement to maintain sufficient levels of adjusted net capital would become insolvent after operating in a Ponzi-like manner for years.”
The complaint alleges that WorldWideMarkets, with TAB Networks performing substantially all of its business activities, acted as the counterparty to forex transactions with at least 14,000 retail customers between 2012 and 2018. The complaint states that although the companies operated out of a New Jersey office, Plaut organized WorldWideMarkets in the British Virgin Islands for the purpose of evading U.S. registration and customer protection regulations that apply to retail forex dealers.
According to the complaint, WorldWideMarkets did not maintain sufficient levels of adjusted net capital; it did not maintain assets equal to its retail forex obligation in a financial institution in a money center country; and it also falsely misrepresented to all of its customers that WorldWideMarkets would hold their money “safely” in “segregated accounts.” In addition, the complaint alleges that from approximately March 2012 through 2018, WorldWideMarkets’ misappropriated a minimum of $4.7 million from customers by improperly using customer assets to pay operating expenses, employee salaries and benefits, and to make cash distributions to Plaut.
The Division of Enforcement thanks and acknowledges the assistance of the U.S. Securities and Exchange Commission, the British Virgin Islands Financial Services Commission, and the Mauritius Financial Services Commission.
The Division of Enforcement staff members responsible for this case Joseph Platt, Joseph Patrick, Joseph Konizeski, Scott Williamson, and Robert Howell and former staff members Camille Arnold and Lindsey Evans.