Release Number 8607-22
Federal Court Orders Texas Fraudulent Forex Trader and His Company to Pay Over $940,000
October 11, 2022
Washington, D.C. — The Commodity Futures Trading Commission today announced the U.S. District Court for the Southern District of Texas entered a consent order on October 7 for a permanent injunction, monetary sanctions, and equitable relief against Troy Mason of Grand Prairie, Texas, and his company, Ztegrity, Inc., formerly based in Houston, Texas.
The consent order resolves a CFTC action filed on June 9, 2021 alleging fraudulent solicitation and failing to register with the CFTC as required by the Commodity Exchange Act (CEA) and CFTC regulations. [See CFTC Press Release No. 8399-21]
The order requires Mason and Ztegrity to pay $643,570 in restitution to victims and to pay a $300,000 civil monetary penalty. The order also permanently prohibits the defendants from further violations of the CEA and CFTC regulations, as charged, and imposes permanent registration and trading bans.
The order finds that from approximately October 2019 to June 2021, the defendants used various websites and social media platforms to fraudulently market their forex trading pool as a version of a savings account that offered a greater yield with similarly low or no risk. The defendants called this forex trading pool “The Black Club” and “The Forex Savings Club,” which their website claimed had received over $460,000 from 411 participants.
The order further finds the defendants induced participation in their forex trading pool by falsely claiming to “guarantee” to repay participants the funds they contributed to their individual “Forex Savings Accounts” and falsely offered participants “with a 100% certainty” portions of the “substantial profit[s]” to be generated using participants’ pooled funds to trade forex. In truth, the defendants knew or recklessly failed to appreciate that no forex trader can guarantee profitable trading, or the avoidance of losses required to guarantee all participants’ contributions, and knew, but failed to inform participants, they had no U.S.-based forex trading accounts.
Finally, the order finds the defendants illegally operated their commodity pool by failing to register as commodity pool operators, in violation of the CEA and CFTC regulations.
The Division of Enforcement staff members responsible for this case are Kyong J. Koh, Lauren Bennett, Luke B. Marsh, and Paul G. Hayeck.
CFTC’s Forex Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories and Articles that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which alerts customers to forex fraud and lists simple ways to spot forex scams.
The CFTC also strongly urges the public to verify an individual or company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that individual or 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 Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected, paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.