CFTC goes after fraudulent Forex scheme Highrise Advantage
A number of entities, including Highrise Advantage, Bull Run Advantage, Green Knight Investments, King Royalty LLC, and SR&B Investment Enterprises, face fraud charges.
The United States Commodity Futures Trading Commission (CFTC) has taken action against a number of entities involved in a fraudulent FX scheme. A complaint filed with the Florida Middle District Court on September 9, 2020, names Avinash Singh and his company Highrise Advantage, LLC, Randy Rosseau and his company Bull Run Advantage, LLC, Daniel Cologero and his company Green Knight Investments, LLC, Hemraj Singh (and his company King Royalty LLC, and Surujpaul Sahdeo and his company SR&B Investment Enterprises, Inc., as defendants.
The complaint, seen by FinanceFeeds, alleges that, beginning in or around February 2013 and continuing to the present (“Relevant Period”), the defendants have solicited and accepted at least $4.75 million from at least 150 participants, in connection with pooled investments in retail Forex contracts. Pool participants deposited funds directly into the Highrise master commodity pool (“Master Pool”) or into one of four “feeder” pools (Bull Run, Green Knight, King Royalty, and SR&B) that funneled most of the deposits they received to the Master Pool.
Rather than use all of pool participants’ funds to trade forex in the Master Pool, Singh and Highrise traded only a small portion and instead misappropriated over $3 million of pool participants’ funds to pay for personal expenses and to make Ponzi-type payments to other pool participants, in addition to payments to feeder fund entities.
The CFTC says that because Highrise, Green Knight, SR&B, King Royalty, and Bull Run solicited funds for the purpose of trading Forex in pooled accounts, each acted as a commodity pool operator (CPO) while operating a commodity pool in its own name. At no time during the Relevant Period were any of these entities registered with the CFTC as CPOs.
Singh, Cologero, Sahdeo, Raj, and Rosseau acted as Associated Persons (APs) of their respective CPOs by soliciting participation in their respective commodity pools. The Individual Defendants were likewise not registered as APs of their respective CPOs during the Relevant Period.
As part of the fraudulent scheme, Highrise issued monthly account statements to pool participants that directly participated with Highrise as well as to the pool participants of at least one Feeder Pool, which misrepresented the profits and balances of the pool participants’ respective interests in the Master Pool. Green Knight, Bull Run, and King Royalty likewise each issued monthly account statements to their pool participants that misrepresented the profits and balances of the pool participants’ respective interests in the Feeder Pools, as well as the Master Pool.
The regulator alleges that the defendants engaged, are engaging, or are about to engage in acts and practices in violation of the Commodity Exchange Act and accompanying CFTC regulations. The CFTC says that, unless restrained and enjoined by the Court, the defendants are likely to continue to engage in the acts and practices alleged in the Complaint.
The regulator seeks to enjoin the defendants’ unlawful acts and practices, to compel their compliance with the Act and Regulations, and to enjoin them from engaging in any commodity interest-related activity. In addition, the Commission seeks civil monetary penalties, restitution and remedial ancillary relief, including, but not limited to, trading and registration bans, disgorgement, pre- and post-judgment interest, and rescission.
