CFTC Alleges Cash FX Group Ran $950 Million Ponzi Scheme
The agency says participants lost at least $406 million after funds raised for retail forex trading were largely misappropriated.
The Commodity Futures Trading Commission alleges Cash FX Group operated a $950 million Ponzi scheme that left participants with at least $406 million in losses.
The agency filed a lawsuit against Cash FX Group S.A., CEO Huascar Jose Lopez Castillo, The Conversion Pros Inc., CEO Ronald Pope and Justin Halladay. It alleges the defendants solicited more than $950 million for purported retail foreign exchange trading, including from people in the United States.
Cash FX allegedly promised returns of as much as 15% a week and claimed that professional traders, proprietary algorithms and artificial intelligence managed the funds. The CFTC alleges the company conducted little forex trading and used money from new participants to make payments presented as trading profits to earlier participants.
The agency also alleges that Cash FX issued false account statements to preserve the appearance of profitable trading and that millions of dollars were paid to the defendants.
The CFTC is seeking restitution, disgorgement of allegedly ill-gotten gains, civil monetary penalties, trading and registration bans, and permanent injunctions.
