Widow of Forex fraudster has to pay more than $800,000 because of his scam
The Securities and Exchange Commission, however, said there would be no civil monetary penalty imposed on the widow of Steve Karroum, head of FX & Beyond.
The United States Securities and Exchange Commission (SEC) has shown some remarkable perseverance with regard to a Forex fraud case. After obtaining the Court’s consent to substitute Sahar Karroum, the widow of FX & Beyond’s head Steve Karroum, as a defendant in the fraud case, the regulator is now pushing for a judgement against Ms Karroum.
As per the documents submitted with the Virginia Eastern District Court earlier this week, SEC proposes a final judgment that would award disgorgement and prejudgment interest against Ms. Karroum to the same extent the initial proposed final judgment would award disgorgement and prejudgment interest against Mr. Karroum. The proposed final judgment, however, would not award injunctive relief or civil penalty against Ms. Karroum.
Let’s translate this into numbers. The widow would not be paying any heavy fines but she and FX & Beyond shall be jointly and severally liable for disgorgement in the amount of $805,960, representing profits gained as a result of the conduct of Mr Karroum, and prejudgment interest thereon in the amount of $74,266.
Let’s recall that Defendant Steve H. Karroum was the President of FX & Beyond Corporation and controlled FX & Beyond. He had claimed to have created a computerized foreign exchange platform that conducted forex trades without loss. FX & Beyond was incorporated in Virginia but its corporate status was terminated on February 29, 2016, due to failure to pay annual fees and file annual reports.
From December 2007 through May 2014, Mr Karroum solicited approximately $4 million from 18 investors for himself and on behalf of his company to be used for Forex trading. He failed to register the investment offerings with the SEC as required. He also failed to invest the funds in Forex trading. Instead, he deposited the funds in FX & Beyond’s account and misappropriated investor funds for his and his wife’s personal use or benefit. Mr Karroum further misled investors by providing materially false or misleading account statements purporting to show profits from Forex trading.