July 18, 2014
CFTC Files Amended Complaint against Daniel K. Steele and His Foreign Currency (Forex) Firm to Include Charges of Fraudulent Misrepresentation, False Statements, and Misappropriation of Approximately $1 Million in Pool Participant Funds
CFTC alleges that Steele solicited at least $1.97 million from at least 24 pool participants to participate in three forex pools
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of an amended Complaint against Defendant Daniel K. Steele of Rolla, Missouri, and his firm, Champion Management International, LLC (Champion Management), charging them with misappropriation, issuance of false account statements, and other acts of fraudulent solicitation and concealment.
The CFTC’s amended Complaint, filed on July 16, 2014, follows a CFTC Complaint against the Defendants filed on September 25, 2013, alleging, among other things, that the Defendants failed to disclose material information and failed to disclose that the counterparty to the retail foreign currency (forex) transactions that were offered or entered into with the respective pools was not registered with the CFTC as a Retail Foreign Exchange Dealer (RFED), in violation of Section 4o(1)(B) of the Commodity Exchange Act (CEA). (See CFTC v. Steele, et al., 13-cv-01900-RWS, U.S. District Court Eastern District of Missouri Eastern Division, and CFTC Press Release and Complaint 6712-13, September 26, 2013.)
The amended Complaint further alleges that Steele knowingly made material misrepresentations to actual and prospective pool participants concerning Defendants’ forex trading and trading results, such as: “I’ve been doing this long enough to know what I can consistently deliver above expenses, in all market conditions…the return is fixed and is currently 5% per month on your invested amount compounded… .”
The amended Complaint also alleges that Steele concealed trading losses, misappropriated approximately $1 million of pool participants’ funds for personal use, and issued false account statements to pool participants reflecting that they were earning profits when instead Steele was misappropriating the majority of their funds, all in violation of Section 4b of the CEA.
The CFTC’s amended Complaint alleges that from approximately February 28, 2011 through September 25, 2013, Steele individually and acting as an agent of Champion Management, solicited at least $1.97 million from at least 24 pool participants to participate in three forex pools.
In its continuing litigation, the CFTC seeks a return of ill-gotten gains, restitution, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws.
The CFTC appreciates the assistance of the Missouri Secretary of State (Securities Division), the United States Postal Inspection Service, and the Swiss Financial Market Supervisory Authority.
CFTC Division of Enforcement staff members responsible for this case are Eugene Smith, Melanie Devoe, George Malas, Kyong J. Koh, Peter M. Haas, Elizabeth Padgett, Mary Lutz, and Paul G. Hayeck.
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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: July 18, 2014