Blast from the past: CFTC goes after Madison Forex International employee Christopher Peck

Past law violations have come back to haunt Christopher Peck, an employee of Madison Forex International, LLC and Chadwick Grayson Bauer & Co., Inc. – companies that were targeted in a Forex fraud case launched by the Commodity Futures Trading Commission (CFTC) back in October 2005.

The CFTC has launched another action against Peck earlier this week at the Florida Southern Bankruptcy Court. This time the action takes the form of adversary proceedings in a bankruptcy case under Chapter 7 of Title 11 of the United States Code. Put briefly, the Commission’s claims concern the debts listed by Peck when he filed a petition for Chapter 7 bankruptcy. The CFTC seeks to determine that the amount of money Peck owes under the CFTC Enforcement Action is not dischargeable.

Let’s recall that, on July 16, 2007, Peck entered into a Consent Order for Preliminary Injunction and Other Equitable Relief Against Defendants in the Enforcement Case.

Under the allegations in the enforcement action, Peck and the other defendants in this case, solicited members of the public with high-pressure, fraudulent sales pitches to open accounts to trade Forex options and Forex futures. Peck’s misrepresentations generally fell into three categories, falsely telling customers: 1) that he was 99.9% positive he could make money for them trading foreign currency options; 2) that he had made a lot of money for Chadwick customers in the past and would make a lot of money for them; and 3) that Chadwick did not charge commissions unless the customer trading was profitable.

The consent order issued several injunctions against Peck regarding registration and trading. Moreover the consent order required Peck to make restitution to enumerated customers in the amount of $550,000, plus pre-judgment interest. The total restitution due as of January 31, 2019, is $1,195,222.72, and continues to accrue interest at a rate of 4.99% per year until paid.

The consent order also assessed Peck a civil monetary penalty of $380,000, plus post-judgment interest. As of January 31, 2019, the Civil Monetary Penalty, along with post-judgment interest, amounts to $622,320.13, and continues to accrue interest at a rate of 4.99% per year until paid.

On November 13, 2017, Peck filed a petition for Chapter 7 bankruptcy, listing the debts incurred in the CFTC Enforcement Case as scheduled debts. The first meeting of creditors was scheduled for December 18, 2018. Accordingly, objections to discharge or to challenge whether certain debts are dischargeable are due February 19, 2019.

The CFTC seeks judgment against defendant Peck that would determine that debts for restitution and civil monetary penalties are not dischargeable in this bankruptcy case.