CFTC brings fraud charges against self-proclaimed Forex “master trader” - FinanceFeeds

CFTC brings fraud charges against self-proclaimed Forex “master trader”

Maria Nikolova

Primarily using social-media platforms and email, James Frederick Walsh fraudulently marketed himself as a highly successfully Forex trader.

The United States Commodity Futures Trading Commission (CFTC) has brought fraud charges against self-proclaimed FX “master trader” James Frederick Walsh. The CFTC complaint against Walsh was filed on July 7, 2020, at the Texas Western District Court.

The complaint, seen by FinanceFeeds, alleges that from at least September 2019 to the present, Walsh fraudulently solicited members of the public for the purported purpose of trading off-exchange leveraged or margined retail FX on their behalves. Primarily using social-media platforms YouTube and Craigslist, and email, Walsh fraudulently marketed himself as a highly successfully forex trader who generated for his clients “average monthly returns of 8% -11%” or “a flat 3% guaranteed profit each month.” To achieve these fictitious results, Walsh falsely claimed to have access to “legal, inside information” about the direction in which Forex markets will move.

More recently, and after he received a cease and desist letter from the Texas State Securities Board related to his fraudulent solicitations – Walsh falsely represented that he was earning even greater trading profits now that the COVID-19 pandemic had impacted the financial markets, claiming that “the returns in forex continue to grow as the rest of the financial world continues to suffer.”

Via these solicitations, Walsh misrepresented and/or omitted material facts by, falsely describing his trading experience, trading skills, and trading results. He also failed to advise clients that he had no U.S.-based forex trading accounts and was not listed on any US-based Forex trading account as holding discretionary trading authority on behalf of the account holder(s).

Furthermore, he failed to inform clients that he was not registered with the CFTC to act as a commodity trading advisor (CTA), and therefore was operating an unlawful business venture.

Also, he did not inform existing and/or prospective clients that the Texas SSB had issued him a cease and desist letter as a result of his fraudulent solicitations, which he was failing to obey.

The CFTC alleges that Walsh has engaged, is engaging, and is about to engage in fraud in violation of Sections 4b(a)(2)(A) and (C), and 4o(1) of the Commodity Exchange Act (“CEA” or “Act”), 7 U.S.C. §§ 6b(a)(2)(A), (C), 6o(1) (2018), and Commission Regulation (“Regulation”) 5.2(b)(1) and (3), 17 C.F.R. § 5.2(b)(1), (3) (2019), and has operated, is operating, and may be about to operate as an unregistered CTA in violation of Sections 4m(1) and 2(c)(2)(C)(iii)(I)(bb) of the Act, 7 U.S.C. §§ 6m(1), 2(c)(2)(C)(iii)(I)(bb) (2018), and Regulation 5.3(a)(3), 17 C.F.R. § 5.3(a)(3) (2019).

In this action, the Commission seeks civil monetary penalties and remedial ancillary relief, including, but not limited to, trading and registration bans, restitution, disgorgement, rescission, an accounting, pre- and post-judgment interest, and such other relief as the Court deems necessary and appropriate.

Read this next

Industry News

Cboe boosts its incentives

A focus on market quality meant that the Cboe BZX exchange was able to capture 36% of all new ETP launches in the US in 2020

Industry News

European ETFs enjoy a trading boom

For Europe as a whole ETF turnover rose by an average of 46% in 2020 to stand at just under €683 billion, or $828 billion

Industry News

Virtu launches big data tools for the buyside

Leveraging existing data science capabilities is a clever retention tool, particularly if that data analysis can show your customers that you are doing a good job

Inside View

Beep beep. Why are FX brokers still using legacy technology? We all need to move on

FX, CFD and listed derivatives brokers need to take heed of how to engage brokers properly. We look inside the developments that are vital to the growth and future sustainability of brokers, and why legacy opinion and sitting on the fence will not work out. Here is the solution.

Industry News

OANDA adds new cross-border payment solution for companies in North America

The partnership combines OANDA’s deep-seated expertise in foreign exchange with Currencycloud’s best-of-breed payment technology and Shift Connect’s world-class customer support to offer a simple-to-use, reliable international money transfer solution for businesses, large or small.

Inside View

Inside view on endless crippling regulation in FX. Surely MiFID was enough?

It still looks as though the whole regulatory obsession with spot FX may be driven by the exchange lobby, hence if you can’t beat them join them – the only thing is of course that if most FX brokers brought their skill and tenacity to the multi asset market, they certainly would beat the exchanges hands down.

Industry News

FXOpen announces the launch of the ForexCup Trading Championship 2021

Global FX and CFD broker FXOpen has today announced they are offering traders the opportunity to compete with the best, to win 50,000 USD, with the launch of the ForexCup Trading Championship 2021.

Industry News

Citadel Securities dominates European FX, and is one of the most profitable businesses in the world

Non bank market makers are absolutely dominating the growth of FX order flow execution. Citadel Securities is now the largest internalizer in Europe by market share, a battle it is winning against Tier 1 banks alongside global leader XTX Markets. It is good to see the OTC sector holding its own.

Industry News

Playtech confirms it has been approached over the sale of Finalto

Finalto was described by the company as Playtech’s outstanding performer in H1 2020