For Release: April 2, 2007
Government Obtains Judgment against Two New York Investment Firms
Century Maxim Fund, AJR Capital and their Principal to Pay More Than $22,500,000 in Restitution and Civil Penalties in Case Brought by the Commodity Futures Trading Commission
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on March 27, 2007, the Honorable Kimba M. Wood, Chief Judge of the United States District Court for the Southern District of New York, entered an order of default judgment against Century Maxim Fund, Inc., and AJR Capital Inc., both of Staten Island, New York, and against their principal Alexsander Efrosman, a/k/a Alex Besser, also of Staten Island. The default order requires restitution, disgorgement and monetary penalties totaling $22,594,601.82.
The order stems from a complaint filed by the CFTC on September 30, 2005 (see CFTC News Release 5153-06, January 30, 2006) alleging that between April 2004 and June 2005, defendants fraudulently solicited and obtained more than $5 million dollars from as many as 110 customers for the purpose of trading managed accounts in forex futures contracts that were not, as required, traded on a registered entity. The order states that Efrosman misappropriated all of the solicited funds for his personal expenses and to fund his gambling activities.
According to the order, Efrosman solicited almost $300,000 from a single Century Maxim investor and solicited almost $4.8 million from at least 109 AJR Capital investors by providing them with fictitious account statements showing trades which never occurred and profits that did not exist. The order further states that Efrosman solicited prospective investors with Century Maxim and AJR Capital by telling them that they could expect returns on their investments of between 13% and 28% per month, which Efrosman supported with fictitious account statements. Additionally, Efrosman used some of his investors for the purpose of soliciting new investments by informing prospective investors that Efrosman could limit their risk of loss and that he never had a losing month trading foreign currency for Century Maxim and AJR Capital. The Century Maxim investor sustained a net loss equal to $285,308.67, and the AJR Capital investors sustained a net loss equal to $4,261,992.24.
The order states that by this conduct, Efrosman violated the terms of a previous cease and desist order entered against him by the CFTC in administrative proceedings in February 2000, for Efrosman's earlier transactions in illegal off-exchange foreign currency contracts and fraud. The order holds Century Maxim and AJR Capital liable for Efrosman's violations and finds that Efrosman was a controlling person of the two firms.
The order, among other things, permanently prohibits the defendants from engaging in any commodity-related activity, including soliciting funds, and from engaging in or directing the trading of any commodity futures or options accounts for or on behalf of any other person or entity. The order requires the defendants to pay a civil monetary penalty of $13,500,000 and requires Efrosman to pay disgorgement of ill-gotten gains in the amount of $4,547,300.91, along with restitution, also in the amount of $4,547,300.91. Presently, Efrosman is believed to be living outside of the United States.
The following Division of Enforcement staff members are responsible for this case: David Acevedo, John Cipriani, Richard Wagner, Stephen Obie.
Last Updated: April 17, 2007