CFTC opposes attempt by alleged Forex fraudster to stay action against him

Maria Nikolova

The US regulator argues that Brett Hartshorn’s motion to stay the civil proceedings against him is simply a delay tactic.

Brett Hartshorn, whom the Commodity Futures Trading Commission (CFTC) accused of having fraudulently solicited at least $906,000 for purposes of Forex trading, has faced opposition to his attempt to halt the civil proceedings against him.

On April 11, 2019, the CFTC filed a Letter with the New York Southern District Court, arguing that a motion by the defendant for an indefinite stay of the action has to be nixed.

Hartshorn sent the following email on April 2, 2019:

I have received a Grand Jury Target Letter from the middle district of Florida U.S. Attorneys Office.

I respectfully request a “Stay” of civil proceedings and a “Stay” of the requirement to “Respond” in the civil case brought against me, due by 4/15/19.

The reason for my request is that I am considering invoking my fifth amendment right in the civil case, so that I do not prejudice the criminal case.

I respectfully request a “Stay” until the criminal case is resolved. Thank you very much for your time and consideration”.

In response to this request, the CFTC says it opposes any stay in this case, much less the open-ended and indefinite stay requested by Hartshorn. The defendant does not claim that he has been charged criminally; thus, there is presently no “criminal case” against him, the regulator notes. In addition, counsel for the CFTC has been informed that the defendant received the target letter on November 2, 2018. Since receiving the target letter more than five months ago, Hartshorn has participated in the civil case, including by: filing a request that the Court vacate the Clerk’s entry of default on November 19, 2018; attending a phone conference with the Court and Plaintiff’s counsel on January 31, 2019; and filing an Answer on February 27, 2019.

According to the Commission, the defendant has not carried his burden of articulating why any stay is appropriate where there has been no indictment. Moreover, such a stay would be prejudicial to the CFTC and not in the public interest because it would indefinitely delay discovery in this case.

Let’s recall that the CFTC has found that from at least June 18, 2008 to in or around 2014 Hartshorn fraudulently solicited at least 13 individuals including members of his church and individuals he met in his local community, to invest in off-exchange foreign currency on a leveraged, margined, or financed basis and to give Hartshorn discretionary authority to trade forex on their behalf. Hartshorn solicited and/or managed at least $906,000 in client funds.

The defendant had challenged the CFTC action based on statute of limitations, improper venue, and lack of CFTC jurisdiction. In September 2018, Judge Andrew L. Carter denied Brett Hartshorn’s motion to dismiss in its entirety.

Read this next

Digital Assets

Europe bans crypto payments to Russians as €10K cap scrapped

The European Union is taking further steps to sanction Russia after the recent developments surrounding its invasion of Ukraine.

Digital Assets

Mt. Gox creditors to get their funds through Bitstamp, other exchanges

The distribution of funds to creditors of the defunct crypto exchange Mt. Gox is set to kick off as the business’s Japanese bankruptcy trustee released a memo updating them of a new function and important deadlines.

Institutional FX

Tradeweb’s trading volumes hit $1.20 trillion per day in September

Tradeweb Markets, the online fixed-income trading platform, today reported its operational metrics for the month of September 2022, which has seen continued strong trading volumes so far. A frenzy that, at this pace, puts it on track to set a new record.

Crypto Insider

Cryptocurrency Spoofing: Why Should Investors Care About It?

Investors don’t just care about making more money. They care about their safety and security, too. This is observable in cryptocurrency, where consumers always protect their financial interests. People have developed this habit of fear of falling victim to possible scams and frauds.

Retail FX

FSCS closes London Capital & Finance (LCF) scandal after three years

The Financial Services Compensation Scheme (FSCS) has provided a final date for closing the scheme to compensate investors who lost money in the London Capital & Finance scandal, namely on 31 October 2022.

Institutional FX

Cboe reports highest ADV for FX volume in two years

Cboe’s institutional spot FX platform today announced its trading volume for the month ending September 2022, which marks its third-highest month ever.

Executive Moves

Investall hires ex-DriveWealth Steve Cortright as CEO

Investall is an AI-driven mobile trading platform for personal finance and investing that delivers AI-driven trading for thousands of equities and major cryptocurrencies.

Digital Assets

SIX integrates CryptoCompare’s cryptocurrency data feed

SIX will provide digital asset data to its clients via the same delivery channels as its leading reference, pricing, corporate actions, regulatory, tax and ESG data.

Digital Assets

CME Group to launch reference rates and indices on Avalanche (AVAX), Filecoin (FIL), and Tezos (XTZ)

Several leading crypto exchanges and trading platforms will provide pricing data for these new benchmarks, starting initially with Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital.