For Release: September 18, 2006
Northern California District Court Orders Defendants in a San Francisco Foreign Currency (Forex) Fraud Action to Pay Over $2 Million in Restitution and Civil Penalties
U.S. Commodity Futures Trading Commission and State of California Obtain Consent Order Settling Charges of Fraudulent Solicitation and Illegal Operation Against National Investment Consultants, Inc., Pacific Best Group Limited, a.k.a. Pacific Best Company Ltd. and Wei Man Tse a.k.a. Raymond Tse, Run Ping Zhou, a.k.a. Flora Zhou, and Yi Kerry Xu
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the Honorable Jeffrey S. White, United States District Court Judge for the Northern District of California, San Francisco Division, entered a consent order against defendants National Investment Consultants, Inc. (NICI) located in San Francisco, Pacific Best Group Limited, a.k.a. Pacific Best Company Ltd., a foreign corporation doing business in San Francisco, and individual defendants Wei Man Tse, Run Ping Zhou, and Yi Kerry Xu ordering them to pay restitution totaling $1.78 million and civil monetary penalties totaling over $400,000 for fraudulent solicitation and offering illegal foreign currency futures contracts in violation of the Commodity Exchange Act and California law.
The order also permanently bans defendants from engaging in any commodity-related activity, including soliciting and trading commodity futures and options. The order requires that Theresa C. Wong, named as a relief defendant, disgorge $18,500 which the order finds she was not entitled to receive and which will be applied to restitution.
The consent order of permanent injunction, entered on September 1, 2006, arises out of a complaint filed by the CFTC and the Commissioner of Corporations of the State of California (State) in CFTC et al v. National Investment Consultants, Inc. et al. in federal court in San Francisco on June 28, 2005. (See CFTC Press Release 5099-05, July 21, 2005.)
The order finds that since at least March 2004, Pacific Best and NICI placed ads in the local San Francisco Chinese language newspaper Sing Tao Daily offering job opportunities with promises of health insurance, good pay and a professional work environment to persons who speak Chinese. NICI and Pacific Best, through Tse, Zhou, and others, provided persons responding to the ads training on how to trade foreign currency and solicited trainees to invest funds and trade themselves. In soliciting trainees and customers, defendants misrepresented the profitability and risk of loss involved in foreign currency futures trading and the experience of the account executives and/or failed to disclose that defendant Zhou had a similar prior action against her brought by the State of California. According to the order, defendants fraudulently solicited at least 45 customers who invested and lost over $1.78 million.
The order further finds that while purporting to offer investment in foreign currency, the defendants were, in fact, offering illegal foreign currency futures contracts to the retail customers.
The CFTC appreciates the cooperation of the California Department of Corporations in bringing this matter.
The following CFTC Division of Enforcement staff members are responsible for this case: Kevin K. Batteh, James Holl, III, Gretchen L. Lowe, and Vincent McGonagle.
Last Updated: April 22, 2010