April 30, 2015
Federal Court Orders California Residents Christopher Valois and Cynthia Wong and Their Companies to Pay over $1.1 Million for Fraud and Registration Violations
Washington DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Cormac J. Carney of the U.S. District Court for the Central District of California entered an Order of Default Judgment against Defendants Christopher Valois and Cynthia Wong, both residents of Irvine, California, and their companies, Bertram Trade LLC and Churchhill Commodities Trading LLC. The Order requires the Defendants jointly to pay restitution of $448,371 and a $700,000 civil monetary penalty. The Order also imposes permanent trading and registration bans against them.
The Order stems from a CFTC Complaint filed on January 28, 2015 (see CFTC Complaint and Press Release 7114-15), charging the Defendants with precious metals and futures fraud, misappropriation, engaging in illegal off-exchange precious metals transactions, and registration violations in violation of the Commodity Exchange Act and CFTC Regulations.
The Order finds that Defendants Valois and Wong fraudulently solicited, managed, or obtained $737,000 from six customers through Bertram Trade and Churchhill. The Order further finds that Defendants falsely advertised on the companies’ websites that they would to buy, store, and insure leveraged precious metals for customers and claimed that customers could access the precious metals at any time. However, according to the Order, the Defendants did not provide any precious metals to customers, and instead misappropriated over $340,000 of customers’ funds by using customer funds for personal and business expenses. Further, the Order finds that Valois, who had been banned from membership by the National Futures Association in 2010, and his wife, Wong, acted as unregistered commodity trading advisors by managing over $380,000 of customer funds in managed futures accounts when they were never registered with the CFTC to do so.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, leveraged transactions such as those conducted by Defendants are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. According to the Order, the Defendants never actually delivered any precious metals to any of their customers.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC appreciates the cooperation of the National Futures Association in this matter.
CFTC Division of Enforcement staff members responsible for this case are Camille Arnold, Joseph Patrick, Robert Howell, Scott Williamson, and Rosemary Hollinger.
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CFTC’s Precious Metals Customer Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.
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: April 30, 2015