CFTC asks for lifting of stay of civil action against Global FX Club head
The civil case may go on, after the criminal case resulted in Michael Wright receiving a prison sentence of 21 months.
The United States Commodity Futures Trading Commission (CFTC) on Wednesday asked the New York Southern District Court to lift the stay on a civil case the regulator has brought against Michael Wright, head of Wright Time Capital Group LLC, or Global FX Club.
The stay was imposed in August 2017 in light of the pendency of a related criminal matter. On October 13, 2017, Mr. Wright pled guilty in the criminal matter to Count One of the Indictment against him (commodities fraud) pursuant to a written plea agreement with the government. Mr. Wright was continued on bail.
In January this year, he was sentenced to 21 months in prison. Back then, the US Government argued that a sentence of imprisonment would help ensure the defendant appreciates the seriousness of his fraud.
In its Court filing on Wednesday, the CFTC says that it has finalized a settlement agreement with the defendant and that the parties are prepared to submit the settlement to the Court for approval. The regulator and Mr. Wright jointly request that the Court lift the August 30, 2017 stay and permit the parties to file a joint motion for the Court to enter a consent judgment.
The CFTC charged Mr Wright and his companies with fraud, misappropriation, and issuing false account statements in connection with a pooled investment in Forex trading. The CFTC Complaint stated that from approximately August 2010 through the present, the defendants engaged in a fraudulent scheme to solicit more than $400,000 from at least 10 members of the public, promising to use pool participant funds for FX trading.
The investors in WTCG were mostly friends, family members and acquaintances of the defendant. While Mr Wright did initially invest the victims’ money in Forex transactions, WTCG began to lose a significant amount of money because of WTCG’s poor trading performance. Instead of being transparent with investors about their losses because of his poor trading performance, the defendant falsified account statements, used new cash inflows from victims to pay back previous investors, and in some instances used investor money to pay for his own personal expenses.
The case is captioned U.S. Commodity Futures Trading Commission v. Wright et al (1:17-cv-04722).
