Texas Slaps Forex Scam with Cease and Desist Order
The Texas State Securities Board (TSSB) is following through on its promise to crack down on online trading fraud.
Today, the TSSB ordered Graco Commercial Capital, LLC, and Raymond V. Grant to cease operations immediately, alleging that the investment fraudsters are basically operating double-your money scams.
The board accuses the defendants of telling potential investors their funds will be deposited and held in a bank account. The bank reportedly places a “block” on the funds and creates a line of credit worth nine times the principal, and an unidentified trader then uses the line of credit to trade forex.
The investors were induced by the defendants to open accounts with false claims that they would earn significant profits, promising quick and lucrative returns over a term of mere weeks. Grant told investors they will receive a guaranteed 25% rate of return per month – but that actual returns may be as much as 100% per month.
According to TSSB documents, Grant was caught touting his false experience in trading FX and other markets. This particular fraud artist leverages his broad social media presence to publish bogus documents to promote his scam, including a trading certificate that purports to be a trading license issued by Texas regulators.
According to a non-appealable cease and desist order, Grant and Graco Commercial falsely claimed to have a professional affiliation with the Better Business Bureau.
Throughout the write-up, the state of Texas lists a number of details, but it seems that the main issue that the authority has was that the defendants promised quick returns even though most investors actually lost their money. It accuses them of allegedly misrepresenting their business model, saying that their interests were aligned with those of their investors when in fact they were not. The brokers also misrepresented their financial expertise, compensation structure, physical location and identity.
“The Enforcement Division earlier learned Grant and Graco Commercial were illegally soliciting the investments in Texas. It afforded the parties the opportunity to become compliant with the Securities Act, and Grant agreed to comply with the law. The order alleges the agreement was a sham. According to the order, after promising to comply with the law, Grant continued to illegally offer the investments in Texas,” the regulator further explains.
Finally, Commissioner Travis J. Iles notes that get-rich-quick schemes gain momentum, elaborating that several recent cases have involved fraudulent trading built around alleged new artificial intelligence or secret software.
Texas’ watchdog is also one of the most active state regulators in the crypto arena, joining federal authorities in going after businesses trying to avoid proper registrations.