For Release: September 27, 2006
Virginia Federal Court Enters Judgment against Foreign Currency (Forex) Firm and Two Individuals in a Fraud Action Brought by U.S. Commodity Futures Trading Commission
Presidential FX, Inc. and Adam Leon Ordered To Pay Jointly Nearly $1.6 Million in Restitution and $1 Million Each in Civil Monetary Penalties; Joseph Marchiano Ordered To Pay $267,660 in Restitution and a $450,000 Civil Monetary Penalty
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the United States District Court for the Eastern District of Virginia entered an order permanently enjoining Presidential FX, Inc., Adam Leon, and Joseph Marchiano from, among other things, engaging in any commodity related activity, including but not limited to commodity trading and soliciting customers to invest in commodity futures and options. The order stems from a Complaint filed by the CFTC on May 2, 2005 (see CFTC News Release 5102-05, July 29, 2005).
The order, entered on September 15, 2006, finds that from at least December 2003 until February 2005, defendants fraudulently solicited nearly $1.6 million from at least 120 retail customers in and outside the United States to invest in options on foreign currency. The fraud included the use of high-pressure sales tactics that exaggerated the likelihood of earning profits while failing to disclose the risks involved in trading options on foreign currency, and misrepresenting Presidential FX’s past investment performance. For example, Marchiano told customers that it was “absolutely impossible” to lose money investing with Presidential FX, despite the fact that from December 2003 to June 2004, Presidential FX did not have a single profitable month of trading. Indeed, during that same time period, 99.1% of Presidential FX customers lost money.
The order requires Presidential FX and Leon, who was the controlling person of Presidential FX responsible for the general day-to-day operations of the company, to pay jointly $1,596,100 in restitution to the investors, and each to pay a $1,000,000 civil monetary penalty. The order requires Marchiano jointly liable with Presidential FX and Leon for $267,660 of the $1,596,100 in restitution to the customers he personally defrauded and to pay individually a $450,000 civil monetary penalty. The order also imposes on all defendants a permanent ban on all commodity related activity.
The following Division of Enforcement staff were responsible for this action: Michael J. Otten, Mary Kaminski, Rachel Entman, Gretchen Lowe, and Lacey Dingman.
Last Updated: April 18, 2010