CFTC seeks imposition of civil monetary penalty of $1.1m on Global FX Club
Wright Time Capital Group, doing business as Global FX Club, fraudulently solicited pool participants to invest in a commodity pool for Forex trading.
The case against Wright Time Capital Group LLC (WTGG), doing business as Global FX Club, and its head Michael S. Wright, continues at the New York Southern District Court. The Commodity Futures Trading Commission (CFTC), which is a plaintiff in the civil action, is seeking a default judgement against WTGG.
In its latest filings with the Court, the CFTC explains that WTCG has failed to appear or answer the CFTC Complaint within the time permitted. The Commission moves the Court to grant final judgment by default against WTCG, order permanent injunctive relief, and impose a restitution obligation and civil monetary penalty.
From approximately 2010 through June 2017m WTCG, by and through its officers, employees, and agents, fraudulently solicited pool participants to invest in a commodity pool for Forex trading. The fraudulent solicitations included misrepresentations that all or substantially all of pool participants’ funds would be pooled and used to engage in forex trading. The company did not use all of pool participants’ funds to engage in Forex trading and instead misappropriated pool participants’ funds for unauthorized personal and business expenses.
The CFTC alleges that WTCG failed to register as CPO. The entity is also accused of commingling pool funds, failure to receive investor funds in pool’s name, and of failure to operate pool as a separate entity. The regulator warns that unless restrained and enjoined by the Court, there is a reasonable likelihood that WTCG will continue to engage in the acts and practices alleged in the Complaint and in similar acts and practices in violation of the Act and Regulations.
The CFTC seeks Permanent Injunction against WTGG, restitution of $371,250, as well as a civil monetary penalty of $1,113,750.
The US regulator has also moved the Court to issue an order against Michael S. Wright, the head of WTGG. To effect settlement of all charges alleged in the CFTC Complaint against Wright without a trial on the merits or any further judicial proceedings, he consents to the entry of Consent Order for Permanent Injunction, Civil Monetary Penalty and Other Equitable Relief.
Wright is alleged to have cheated and defrauded, or attempted to cheat and defraud, and willfully deceived, or attempted to deceive, WTCG pool participants by, among other things, knowingly or recklessly:
misrepresenting to prospective pool participants that all or substantially all of participants’ funds would be pooled and used to engage in forex trading;
sending pool participants false account statements that inflated and misrepresented the value of their accounts and the pool’s trading returns;
misrepresenting that pool participant funds were available for withdrawal; and
misappropriating pool participants’ funds for unauthorized personal or business expenses rather than engaging in retail forex trading and failing to disclose that pool participants’ funds had been misappropriated, in violation of the Commodity Exchange Act and the Commission Regulations.
Wright controlled WTCG, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, WTCG’s acts in violation of the Commodity Exchange Act and the Commission Regulations. Hence, he is liable for them.
Wright shall pay restitution in the amount of $400,000, plus post-judgment interest, as well as a civil monetary penalty of $100,000.