Michael S. Wright, of Jersey City, New Jersey, and his firm Wright Time Capital Group LLC, doing business as Global FX Club, are facing fraud charges following a civil enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) in the Southern District of New York. The complaint alleges a fraudulent scheme involving the misappropriation of funds from investors in a foreign currency (forex) trading pool.
According to the CFTC, from approximately August 2010 through the present, Wright and WTCG allegedly solicited over $400,000 from at least ten members of the public, promising to use the funds for forex trading. However, the CFTC alleges that only a portion of the investor funds were actually traded, with the majority misappropriated for personal and business expenses, including items like food, clothing, jewelry, and entertainment.
To conceal the alleged trading losses and misappropriation, Wright and WTCG are accused of issuing false account statements to investors. These statements reportedly created the illusion of positive trading gains even during periods where little or no trading occurred, or when trading resulted in losses. The CFTC also alleges failures to maintain the commodity pool as a separate legal entity, receiving funds in the names of Wright and WTCG rather than the pool itself, and a failure to register WTCG as a commodity pool operator.
The CFTC’s complaint seeks restitution for defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans, and a permanent injunction against future violations of federal commodities laws. The agency is pursuing these remedies through continuing litigation.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation, New York Field Office, in this matter. Alejandra de Urioste, Trevor Kokal, K. Brent Tomer, Lenel Hickson, Jr., and Manal M. Sultan of the CFTC’s Division of Enforcement are handling the case.
The CFTC reminds investors to be wary of unregistered investment schemes and encourages reporting of suspicious activity via its toll-free hotline (866-FON-CFTC) or online complaint form.
Source: CFTC.gov
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