Head of Global FX Club has civil action against him stayed, as criminal case advances

Forex fraud is taken extremely seriously by US authorities, with one more piece of proof for that provided by the New York Southern District Court where proceedings against Michael S. Wright and his firm Wright Time Capital Group LLC, d/b/a Global FX Club have been developing on two fronts – civil and criminal.

In June, the Commodity Futures Trading Commission (CFTC) filed a civil case against Mr Wright and his companies, charging them with fraud, misappropriation, and issuing false account statements in connection with a pooled investment in Forex trading.

Specifically, the CFTC Complaint alleged that from approximately August 2010 through the present, Defendants engaged in a fraudulent scheme to solicit more than $400,000 from at least 10 members of the public, promising to use pool participant funds for FX trading. Defendants allegedly traded only a part of pool participants’ funds and misappropriated the bulk of those funds for unauthorized personal or business expenses such as food, clothing, jewelry, and entertainment.

On August 30, 2017, the New York Southern District Court issued an Order to Stay the civil action. This, however, was prompted by the fact that Mr Wright is also a defendant in a criminal case.

The criminal action, captioned USA v. Wright (1:17-cr-00459), relates to the same events and shares allegations with the civil case. Mr Wright is accused, inter alia, of having falsely represented to investors that their money was used in off-exchange Forex transactions and of having utilized investor funds in a Ponzi-like manner to make payments to other investors.

According to the indictment, Mr Wright is charged on two counts: commodity fraud and wire fraud. He has to forfeit all property that is derived from proceeds from the offenses committed, including the sum of money generated from the said offenses.

Mr Wright was arraigned on July 28, 2017. He pleads not guilty to the criminal charges.