September 28, 2015
CFTC Orders Georgia Resident Michael E. Simmons and His Company Global Consortiums, LLC to Pay Restitution and a Civil Monetary Penalty Totaling More than $589,000 for Engaging in Foreign Exchange Commodity Pool Fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today entered an Order requiring Respondents Michael E. Simmons and Global Consortiums, LLC, both of Fayetteville, Georgia, jointly to pay a $360,000 civil monetary penalty and restitution totaling $229,660 for committing fraud and misappropriation in connection with operating a commodity pool that offered leveraged or margined off-exchange foreign currency (forex) transactions. Simmons was the sole owner, president, and chief executive officer of Global Consortiums. Neither Respondent has ever been registered with the CFTC.
The CFTC Order requires Simmons and Global Consortiums to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged, and permanently bans them from registering, trading, and engaging in other CFTC-regulated activities.
According to the Order, from at least March 2010 through July 2012, Respondents fraudulently solicited and accepted at least $435,985 from at least 10 individuals to participate in a commodity pool to trade forex, but never traded the investors’ funds. Respondents created and distributed account statements to investors that falsely claimed that the commodity pool had traded forex profitably. The Order further finds that instead of investing the funds, Respondents misappropriated at least $217,160 of investors’ funds for non-investment purposes. Although Respondents later partially repaid some of their investors, Respondents still owe investors $229,660, according to the Order.
Additionally, the Order finds that Global Consortiums operated as a Commodity Pool Operator (CPO) without registering as such, as required, and that Simmons acted as an unregistered Associated Person of that CPO.
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.
CFTC Division of Enforcement staff members responsible for this case are Karin N. Roth, Christopher Giglio, Douglas K. Yatter, Lenel Hickson, Jr., and Manal M. Sultan.
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CFTC’s Foreign Currency (Forex) Fraud and Commodity Pool Fraud Advisories
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.
The CFTC has also issued a Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
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: December 20, 2017