May 16, 2012
Federal Court in South Carolina Orders Ronald E. Satterfield and Nicholas and Patricia Bos to Pay over $7.5 Million for Fraud in Connection with a Forex Ponzi Scheme
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) obtained two federal court consent orders of permanent injunction, one order requiring defendant Ronald E. Satterfield, of Charleston, S.C., to pay $957,146 of restitution and a $2,871,438 civil monetary penalty, and the other order requiring defendant Nicholas Bos (Bos) of Ludington, Mich., to pay $849,146 of restitution and a $2,547,438 civil monetary penalty, for operating a foreign currency (forex) Ponzi scheme. The Bos order also requires Patricia Bos (P. Bos), a relief defendant and Bos’ wife, to disgorge $295,000 in ill-gotten gains. The orders also impose permanent trading and registration bans against Satterfield and Bos.
The consent orders, entered by Judge Richard M. Gergel, of the U.S. District Court for the District of South Carolina, Charleston Division, arise from a CFTC complaint filed on November 8, 2010, that charged the defendants with operating a forex Ponzi scheme involving the fraudulent solicitation of at least $3.3 million from at least 70 individuals – residing in South Carolina, North Carolina, Michigan, and Maryland – to engage in leveraged or margined forex transactions (see CFTC Press Release 5935-10, November 15, 2010).
The Satterfield order, entered on May 9, 2012, finds that Satterfield fraudulently solicited customers by representing that his forex trading was profitable and that customers could receive monthly returns ranging from two to four percent. The order also finds that Satterfield issued false account statements reflecting the promised returns when, in fact, a large amount of customer deposits were used to pay purported returns to other customers, rather than to trade forex. The forex trading Satterfield actually did, according to the order, resulted in losses in almost every month.
The Bos order, entered on April 25, 2012, finds that Bos fraudulently solicited customers to trade forex through accounts managed by Satterfield. The order also finds that Bos falsely represented to customers that there would be no risk to their deposits and failed to disclose that he was collecting commissions and fees paid from customer funds and that he misappropriated $295,000 in customer funds to purchase a house in Ludington, Mich., titled in his name and in that of his wife.
Default order entered against corporate defendants in June 2011
Earlier, on June 14, 2011, the CFTC obtained a default judgment order from Judge Gergel against the corporate defendants in this action: Graham Street Forex Group, LLC and Shore-2-Summit Financial, LLC. The default order requires the corporate defendants jointly and severally to pay over $5.6 million in equitable relief and a monetary sanction and imposes permanent trading and registration bans against them.
The CFTC appreciates the assistance of the U.S. Attorney’s Office, District of South Carolina, and the South Carolina Attorney General’s Office.
CFTC Division of Enforcement staff members responsible for this case are Eugene Smith, Patricia Gomersall, Christine Ryall, Paul G. Hayeck, and Joan Manley.
Last Updated: May 16, 2012