CFTC wins $29 million case against FX scam Financial Tree

Rick Steves

The U.S. District Court for the Eastern District of California has agreed with the CFTC over claims of fraud against John D. Black, Christopher Mancuso and Joseph Tufo, and related Forex and binary options scams, as well as Colorado-based attorney John P. Glenn. 

The court found that the defendants used Black’s affiliated entities Financial Tree, Financial Solution Group, and New Money Advisors, to solicit investors to contribute funds to fraudulent binary options and forex commodity pools.

Defendants were found to have misappropriated millions of dollars of those funds for personal use, made Ponzi payments to existing pool participants with new pool participants’ funds, and made false statements to explain their failure to return funds and deliver promised profits.

The order finds they are liable for solicitation fraud in connection with binary options and retail foreign currency (forex) transactions, fraud by commodity pool operators (CPOs) and associated persons (APs), multiple CFTC registration violations, and failure to comply with CPO regulations.

The scam took place between June 15, 2015 to June 15, 2020, according to the CFTC investigation.

The court ordered defendants Black, Financial Tree, Financial Solution, New Money, Mancuso, Glenn, and Glenn’s law firm to pay nearly $10.5 million in restitution jointly and severally.

The order further imposes civil monetary penalties of approximately $5.4 million on Black, Financial Tree, Financial Solution, and New Money; $12.1 million on Mancuso.

Joseph Tufo is ordered to pay over $4.5 million of that restitution jointly and severally with the other defendants, and $680,000 in penalties. Attorney John P. Glenn and his law firm is ordered to pay $850,000 in penalties.

Seven relief defendants will also disgorge over $2.6 million they received from the scheme to which they have no lawful entitlement, the court ordered.

In August 2021, the financial watchdog brought charges against Glenn totaling over $26,500,000: one seeking restitution ($9,403,279.13); one seeking disgorgement ($285,438.24); and one seeking civil monetary penalties ($16,857,022).

Glenn filed a voluntary Chapter 13 petition with the Bankruptcy Court for the District of Colorado on January 6, 2021.

Financial Tree was found to have operated as a Ponzi scheme for years, trading only a small portion of the money taken in and misappropriated the rest – concealing that misappropriation through Ponzi payments, false accounts statements, and other material misrepresentations and omissions to victims of the Financial Tree Fraud.

The CFTC reminded the public that whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.

Read this next

Digital Assets

Midas launches investment strategies for the ‘crypto winter’

Midas.Investments has released three new investment strategies on its custodial CeDeFi platform, creating new opportunities during the ‘crypto winter’.   The platform merges diverse approaches to digital asset management into single-click products to let investors gain steady profits in any market conditions — including the ongoing bear market. a custodial CeDeFi platform, CeDeFi: Unlocking the […]

Digital Assets

Bitcoin.com Wallet adds several ERC-20 tokens

The product expansion includes representatives of the DeFi world, the Metaverse, and the largest stablecoins.

Market News

Savvy Investors to Profit Whether the Stock Market Rebounds or Not

Equities have gone up enormously since the low. SP500 has gained 13.88% since June 17. In August, the indices drifted sideways. On Wall Street, veteran investors expect a move in either direction.

Industry News

Wall Street-backed MEMX obtains SEC approval for options trading platform

The company has raised more than $135 million in funding from 18 stock trading and investing heavyweights, including BlackRock, Citadel Securities, and Morgan Stanley.

Industry News

Amundi US launches ESG strategy that seeks to outperform S&P 500

Amundi’s Responsible investing team includes more than 45 specialists, and its ESG analysis covers more than 13,500 issuers across debt and equity.

Industry News

Verto launches embedded FX payments solution

The Verto API automates currency conversions, tracks payments and exchange rates in real-time, and is being launched in the follow-up of a $10 million in Series A funding last year.

Industry News

SEC awards over $16m to whistleblowers after another successful enforcement action

The program is 10 years-old and has arguably played a critical role in the Division of Enforcement’s ability to effectively detect wrongdoing, protect investors and the marketplace, and bring violators to justice.

Digital Assets

Ripple submits most succint explanation of Hinman issue in XRP lawsuit

It might be useful to get up to date as this could be the end of the road for the SEC.

Retail FX

TradingView integrates first Brazilian broker, Órama Investimentos

Órama offers all kinds of investment products, from fixed income to crypto-related funds.

<