February 27, 2014
CFTC Charges Melody Nganthuy Phan of California and Her Companies, My Forex Planet, Inc., Wal Capital, S.A., and Top Global Capital, Inc., with Operating a Fraudulent $3.7 Million Off-Exchange Forex Scheme
The CFTC also Charges Melody Nganthuy Phan with Fraud by an Unregistered Commodity Pool Operator
Washington, DC - The US Commodity Futures Trading Commission (CFTC) filed a civil enforcement action charging Defendants Melody Nganthuy Phan (Phan) of California and her companies, My Forex Planet, Inc. (MFP), Wal Capital, S.A. (Wal Capital), and Top Global Capital, Inc. (TGC) with operating a fraudulent off-exchange foreign currency (forex) scheme. The CFTC Complaint also charges Phan with fraud by an unregistered commodity pool operator. The scheme allegedly fraudulently solicited at least $3,764,214 from over 174 customers and misappropriated customer funds in an effort to perpetuate the fraud.
Specifically, the Complaint alleges that, from at least January 2009 and through February 2011, Phan, Wal Capital, and TGC, through MFP, used forex training classes to directly and indirectly solicit actual and prospective clients to open self-traded forex accounts at Wal Capital and pooled forex trading at TGC. During the forex trading classes given by MFP, Defendants falsely stated, among other things, that 1) Phan was a highly successful forex trader who had made millions of dollars trading forex, 2) Phan’s forex trading system, which was taught in MFP classes, was a very safe system that virtually guaranteed profit over time, and 3) money deposited by Defendants’ customers would be used for its intended purpose. The Complaint alleges that all of these representations to clients were false. In fact, Phan lost over $1.4 million trading forex in multiple accounts in her name or under her control, according to the Complaint.
Additionally, the Complaint alleges that Defendants used customer funds for unauthorized purposes, such as paying other customer withdrawals, as well as business expenses such as radio ads and marketing.
The CFTC Complaint seeks restitution, civil monetary penalties, restitution, trading and registration bans, and a permanent injunction prohibiting further violations of the federal commodities laws, as charged.
The CFTC greatly appreciates the assistance of the UK Financial Conduct Authority.
CFTC Division of Enforcement Staff members responsible for this case are Alison Wilson, Maura Viehmeyer, Boaz Green, Heather Johnson, James H. Holl, III, and Rick Glaser.
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CFTC’s Foreign Currency (Forex) Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: February 27, 2014