“I am lost” – Forex trader resorts to emotional pleas in an effort to dismiss fraud case against him
After perpetrating a Forex fraud on his friends and members of his church, Brett Hartshorn resorts to pleas about how he “can make a great and positive difference in this world”.
The United States Commodity Futures Trading Commission (CFTC) has turned to the New York Southern District Court with a rather unusual request – to consider an email sent by a defendant in a Forex fraud case as a Motion to Dismiss. Typically, such motions are the result of a work of counsel for the defendants and, so, they comply with certain formal standards. The case at hand, captioned U.S. Commodity Futures Trading Commission v. Hartshorn (1:16-cv-09802), apparently requires a somewhat different approach that would reflect the peculiarities of an email sent by the defendant – Brett Hartshorn, to the Judge assigned to his case on Tuesday, February 6, 2018.
The email, which is rather informal, represents a request by the defendant to dismiss the case against him based on… emotional pleading.
In the email, Mr Hartshorn tells the story of his enterprise, explaining that he and his friends never used any contracts or legal documents of any kind.
“They would just meet me for a cigar or have me over for dinner and share any profits, at their whim”.
Elaborating on his relations with his clients, he says that “These are people that came to my home for a couples Bible study for years, people that came to my home for a weekly card game for years, people my Family and I stood with every week worshipping in our Church together for years, people we travelled with, people who we celebrated birthdays with…my very best friends in the whole world”.
Then the emotional story-telling continues with more pleas: “Your Honor, I know my former best friends have suffered monetary losses,and this is a very hard and horrible thing for them…I have completely lost my life. I have nothing, and I have no idea what to do and how to move forward. I am scared, I don’t sleep hardly at all, I don’t know what to tell my Wife and Children. We are all hanging by a thread. I am lost”.
Mr Hartshorn asks the Court to dismiss the case against him, so he “can make a great and positive difference in this world”. He does not specify, however, how he plans to compensate his friends for the losses they suffered.
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.
Regarding the emotional pleas in the defendant’s email dated February 6, 2018, let’s also note that the promises he made to his friends about his trading were also pretty emotional:
“Feel free to bring me a check to church tonight … it’s cool for me to see my reward whenever it’s over a grand as we agreed. Very motivating! These checks will eventually be five figures…how much fun will that be for both of us !”
“I can without a doubt get you back to whole and beyond… Stick with me… This will give God a chance to really show off !”
Despite touting his skill and past success in trading foreign currency on behalf of himself and others, and assuring clients that he would limit their risk of loss, the reality was far different. Hartshorn had repeatedly employed risky trading strategies and suffered significant losses trading forex on behalf of others – often devastating single-day losses resulting from margin calls. Hartshorn never disclosed these losses to subsequent clients. Instead he used misleading claims:
“Maybe we’ll see you at church tonight. I am saving you a spot on my platform … Because I am going to bless you like I am blessing this new account which as you can see i opened on Nov. 6th”.
Hartshorn is accused of fraud in connection with retail Forex transactions, failure to register as a CTA and failure to comply with relevant CTA requirements.
The CFTC is seeking that the Court enters an order requiring Hartshorn to make full restitution to every person or entity who sustained losses proximately caused by Hartshorn’s violations. In addition, the CFTC asks the Court to enter an order requiring Hartshorn to pay a civil monetary penalty under the Act, to be assessed by the Court, in an amount of not more than the greater of (1) triple the monetary gain for each violation of the Act and Commission Regulations or (2) $140,000 for each violation of the Act and Commission Regulations.
If the Court agrees that the defendant’s email should be treated as a Motion to Dismiss, then the CFTC will reply no later than March 21, 2018.
