CFTC seeks $2.26m in penalties against ApuroFX, Jin Choi, and JCI over Forex fraud

Maria Nikolova

Jin Choi, a Korean citizen, lied about ApuroFX being registered with the CFTC as a futures commission merchant and being a member of the National Futures Association.

The United States Commodity Futures Trading Commission (CFTC) continues its efforts to put an end to fraudulent online trading schemes. The regulator is seeking a default judgement against Jin Choi, Apuro Holdings, Ltd d/b/a ApuroFX and JCI Holdings USA d/b/a JCI Trading Group, LLC.

The relevant documents, filed with the California Central District Court and seen by FinanceFeeds, request that the Court enters an Order for Default Judgment, Permanent Injunction, Civil Monetary Penalty, and Other Equitable Relief against the defendants.

On May 14, 2018, the CFTC filed a Complaint for Injunctive and Other Equitable Relief and for Civil Monetary Penalties Under the Commodity Exchange Act and Commission Regulations against the defendants for violations of the Commodity Exchange Act. To date, none of the defendants in this action have pled, answered, or otherwise defended the action, the CFTC explains.

Defendant Jin Choi resides in Los Angeles, California, and owns and operates AHL, ApuroFX, JCI Holdings, and JCI Trading Group. Choi is a citizen of the Republic of South Korea who appears to have entered the United States in April 2015 on a F1-Visa. This document allows a foreign individual to enter into the United States as a full-time student at an accredited college, university, seminary, conservatory, academic high school, or other academic institution or in a language training program. Choi has never been registered with the CFTC in any capacity.

According to the CFTC’s Complaint, from at least January 2014 and continuing through the present, Jin Choi, acting individually and as the principal and agent of Apuro and JCI, fraudulently solicited and accepted at least $1,155,572 from fourteen individuals for the purported purpose of trading off-exchange leveraged or margined retail Forex contracts on their behalf. The defendants solicited and continue to solicit clients or prospective clients through investor seminars hosted by Choi in the United States and abroad, social media accounts and various websites operated by Choi.

Choi and the entities he operated are said to have made material misrepresentations in their solicitations including by misrepresenting that clients’ funds would be used to open trading accounts in their names and to trade forex on their behalf and that ApuroFX is registered with the CFTC as a futures commission merchant (FCM) and a member of the National Futures Association.

In reality, the defendants did not conduct any Forex trading on behalf of the clients. Of the $1,155,572 the defendants solicited for FX trading, Choi deposited only $3,000 of these funds into a forex trading account in Choi’s name at Forex Capital Markets, LLC (FXCM). Choi opened the FXCM account in mid-April 2016, with a deposit of $3,000, and he was the sole person authorized to trade in the account. However, no trading occurred in the FXCM account, and Choi closed the FXCM account in early-May 2016 after withdrawing the $3,000 he originally deposited.

The defendants misappropriated all of the money they obtained from clients and used these funds to support Choi’s lavish lifestyle, including the rental of a Beverly Hills, California condominium and the purchase and lease of luxury automobiles.

The majority of clients were unable to obtain a return of any of their funds despite their repeated demands to the defendants.

The CFTC alleges that:

  • Choi, Apuro, and JCI committed Forex fraud (Complaint Count I);
  • Apuro and JCI committed fraud as Commodity Trading Advisors (Complaint Count II);
  • Apuro and JCI failed to register with the CFTC as Commodity Trading Advisors (Complaint Count III);
  • Choi failed to register with the CFTC as an Associated Person of a Commodity Trading Advisor (Complaint Count IV).

Accordingly, the CFTC requests that the Court orders the defendants to pay, on a joint and several basis, restitution in the amount of $1,131,572 and a civil monetary penalty in the amount of $1,131,572. Thus, the total is $2.26 million, plus post-judgment interest.

In the end of July this year, the CFTC launched a civil action against another unlicensed Forex broker targeting US clients – JAFX. The CFTC Complaint against the broker says that, beginning in at least September 2016 and continuing to the present, JAFX has offered retail Forex services to customers in the United States. The entity has never been registered as a retail foreign exchange dealer (RFED) or in any other capacity with the CFTC.

Earlier this summer, the case brought by the United States Commodity Futures Trading Commission (CFTC) against retail Forex broker Tallinex was concluded, as the US regulator has managed to secure a default order against the company. On Monday, July 9, 2018, Judge David Nuffer of the Utah District Court signed an order imposing a permanent injunction and monetary penalties on the broker. Tallinex was ordered to pay restitution in the amount of $10,289,391, plus post-judgment interest.

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