Release: 4732-03
For Release: January 6, 2003


$K’s Forex International, Inc., a Florida Firm d/b/a SK’s Forex International, Inc., and Elizabeth Miskus Kemp, Found to Have Operated Illegal Foreign Currency (FOREX) Futures Trading Firm and to Have Misappropriated Customer Funds

WASHINGTON, DC - The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of an administrative proceeding against respondents $K’s Forex International, Inc. (d/b/a SK’s Forex International, Inc. [SK]), formerly located in North Miami Beach, Florida, and Elizabeth Miskus Kemp, residing in Fort Lauderdale, Florida, for engaging in fraudulent sales and solicitations of illegal, off-exchange futures contracts on foreign currency (FOREX). The CFTC simultaneously issued an Order Instituting Proceedings, Making Findings and Imposing Remedial Sanctions against SK and Kemp, accepting their offers of settlement.

Respondents Alleged to Have Made False Claims about Profitability and Risks of Trading Futures on Foreign Currency

The order alleges that, between October 1999 and September 2000, SK and Kemp engaged in a fraudulent scheme to solicit and accept over $400,000 from unsophisticated retail investors for the purpose of engaging in speculative trading of illegal futures on foreign currencies by stating that they were offering investors an opportunity to make large profits in a very short period of time on the rise in the value of foreign currencies relative to the dollar. SK and Kemp told customers that they would double a customer’s investment in less than a month and that investments could only sustain minimal losses because SK used stop/loss orders, according to the CFTC order.

The CFTC order further alleges that during the time Kemp was principal of SK, from April through December 2000, respondents misappropriated customer funds for uses unrelated to commodity futures trading and, in order to conceal their misappropriation of these funds, produced fictitious account statements and falsely misrepresented to some investors that their funds had been used to purchase futures contracts. In reality, the misappropriated funds were used to pay the personal expenses of the respondents, according to the order.

SK and Kemp have each submitted an offer of settlement, in which they consent to the CFTC’s entry of the order in which SK and Kemp each agree: (1) to cease and desist from violating Sections 4(a) and 4b of the Commodity Exchange Act; (2) to be subject to a permanent trading ban; and (3) to be jointly and severally liable to pay a contingent civil monetary penalty in an amount of $220,000, pursuant to a ten-year payment plan. The CFTC order also prohibits SK and Kemp from engaging in any future off-exchange commodity futures or options activities.

The following CFTC Division of Enforcement staff are responsible for this case: Gretchen L. Lowe, Richard Foelber, and Elizabeth Padgett.

Media Case EnforcementContact:
Gretchen L. Lowe
Associate Director
CFTC Division of Enforcement
(202) 418-5379

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The CFTC Has Issued A Consumer Advisory Warning the Public of the Risks of Foreign Currency (FOREX) Trading and Foreign Currency Scams

The CFTC has issued a Consumer Advisory (at urging the public to scrutinize claims of high-return, low-risk investment opportunities in foreign currency trading. This Consumer Advisory provides "red flags" to look for, and cautionary steps to be taken, before making an investment. The CFTC has also issued Advisories concerning the Commodity Futures Modernization Act of December 2000 (CMFA), and how FOREX firms may lawfully offer foreign currency futures and options trading opportunities to the retail public (see CFTC Press Release 4625-02, March 21, 2002; CFTC Advisory, March 21, 2002; and CFTC Advisory 06-01, February 5, 2001).

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