Unique Forex, Blackbox Pulse, White Cloud Mountain ordered to pay penalty of $1.95m in FX fraud case
The defendants will have to pay $762,807 in restitution and disgorgement, plus a civil monetary penalty in the amount of $1,950,000.
A Forex fraud case brought by the United States Commodity Futures Trading Commission (CFTC) against Thomas Lanzana, individually and d/b/a Unique Forex, Nikolay Masanko, Blackbox Pulse, LLC, and White Cloud Mountain, LLC, has concluded at the New Jersey District Court.
Late last week, Judge Madeline Cox Arleo signed an Order against the defendants. As per the Order, the defendants are permanently restrained, enjoined, and prohibited from engaging in conduct that violates the Commodity Exchange Act. They are also permanently restrained, enjoined, and prohibited from trading or entering into any transactions involving commodity interests in the future.
Lanzana, Masanko, Blackbox Pulse and White Cloud Mountain will also have to pay $762,807.24, in restitution and/or disgorgement of profits. The defendants shall pay a civil monetary penalty in the amount of $1,950,000.
According to the CFTC Complaint, from at least 2013 to the present, through social media, websites, and word of mouth, Lanzana presented himself as a successful Forex trader to solicit and accept customer funds for the purpose of trading Forex at Blackbox Pulse or Unique Forex. His emails to customers featured account statements and links to YouTube videos showing FX trades that were never made. In reality, Lanzana did not use all of the customer funds he accepted to trade Forex, but instead misappropriated a portion of those funds to pay other customers who requested the return of their funds, in the manner of a Ponzi scheme, and for his own personal use and benefit.
By at least 2014, Masanko, who had previously worked with Lanzana as a broker at various firms registered with FINRA in the late 1990s and early 2000s, started referring friends and family members (including his own parents) to Unique Forex. For the customers he solicited, Masanko received a percentage of the performance fees that Lanzana charged.
On top of that, Lanzana made misleading statements about Blackbox Pulse and Unique Forex accounts at Forex Capital Markets LLC (FXCM), which was registered with the CFTC as a retail foreign exchange dealer until March 2017. These statements made it appear as if Blackbox Pulse and Unique Forex traded an account worth hundreds of thousands of dollars at FXCM. In fact, no account in the name of “Blackbox Pulse, LLC” and/or “Unique Forex” exists at FXCM.
Since approximately 2016, Lanzana has stopped returning all funds to customers who have requested the withdrawal of their funds, and has instead sought to keep customer funds via a series of misrepresentations and false promises.
The CFTC accused the defendants of: Fraud in Connection with Forex; Manipulative or Deceptive Device, Scheme, or Artifice to Defraud; Fraud by a Commodity Pool Operator and an Associated Person of a Commodity Pool Operator; Failure to register as a Commodity Pool Operator; Failure to register as an AP of a Commodity Pool Operator; and Prohibited Activities of a Commodity Pool Operator.
