For Release: July 19, 2006
Miami, Florida Area Residents Melvin Webman and Larry Webman Ordered by Federal Court to Pay Over $2.9 Million in Foreign Currency Fraud Action Brought by the U.S. Commodity Futures Trading Commission
International Forex Advisory Group and Worldwide Currencies Corp. Ordered to Pay Over $6 Million in Restitution and Civil Monetary Penalties
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that on July 10, 2006, the United States District Court for the Southern District of New York entered a consent order of permanent injunction against Melvin Webman and Larry Webman, (the Webmans), both of Miami, Florida, settling CFTC charges that the defendants fraudulently solicited customers to purchase foreign currency (forex) options contracts.
The order stems from a CFTC complaint filed on May 19, 2005 (see CFTC News Release 5079-05) charging that,, from at least December 2003 to December 2004, the Webmans, along with International Forex Advisory Group (IFA Group), Worldwide Currencies Corp. (WCC), companies controlled by the Webmans, and Lyle Wexler, a broker employed at both companies, fraudulently solicited customers to purchase foreign currency (forex) options by using misleading statements and misrepresenting to customers and potential customers the profit potential of such contracts.
Specifically, the court’s order finds that IFA Group and WCC, through their employees, induced customers to trade by making false and misleading representations through fraudulent solicitations. Furthermore, the order finds that all but two of IFA Group’s retail customers and all of WCC’s retail customers lost substantially all of their investments. The order also finds that the Webmans were controlling persons of the IFA Group and WCC.
The court ordered sanctions that require the Webmans to pay $2,957,912 in restitution to defrauded customers and each to pay a $500,000 civil monetary penalty.
Default Judgment Entered Against IFA Group and WCC
On November 5, 2005, the court entered a default judgment against IFA Group and WCC ordering, among other things, that IFA Group pay a civil monetary penalty of $3,178,530 and restitution in the amount of $2,701,960. Additionally, the default judgment ordered WCC to pay a civil monetary penalty of $526,470 and restitution totaling $255,952.
The case against defendant Wexler remains ongoing.
The following CFTC Division of Enforcement staff members are responsible for this case: John J. Cipriani, John T. Wise, David Acevedo, Lenel Hickson, Jr., Stephen J. Obie, and Richard B. Wagner.
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The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.
In addition, the CFTC publishes a series of Consumer Advisories alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.
Last Updated: December 26, 2017