Alan Friedland of Florida and his companies, Fintech Investment Group, Inc. and Compcoin LLC, are facing charges of fraudulently soliciting over $1.6 million from customers through a leveraged, off-exchange foreign currency (forex) scheme, according to a complaint filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Middle District of Florida.
The CFTC alleges that from at least 2016 through 2018, Friedland and his firms convinced customers to purchase a digital asset called Compcoin with false promises. They claimed Compcoin would grant access to Fintech’s proprietary forex trading algorithm, known as ART, and guarantee high rates of return.
The complaint details that Friedland falsely advertised the functionality of Compcoin and ART, stating ART was “ready for release” despite knowing that Fintech hadn’t obtained the necessary approval from the National Futures Association (NFA). As a result, purchasers of Compcoin never gained access to the promised trading algorithm and were left with a worthless asset.
The CFTC is seeking civil monetary penalties, restitution for defrauded customers, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
In a related action, the NFA filed a member responsibility action against Fintech and Friedland on March 30, 2020, for failing to cooperate with an NFA investigation into similar activities. This resulted in Fintech and Friedland being summarily suspended from NFA membership and prohibited from soliciting or accepting customer funds for forex trading.
The CFTC acknowledged the assistance of the NFA and the Financial Markets Authority of New Zealand in this investigation. The case is being pursued by Janine Gargiulo, Gabriella Geanuleas, Christopher Giglio, K. Brent Tomer, Lenel Hickson, and Manal M. Sultan of the CFTC’s Division of Enforcement.
The CFTC reminds the public to verify a company’s registration before investing and to be wary of unregistered entities. Information on potential scams and registration status can be found on the CFTC website and through NFA BASIC.
Source: CFTC.gov
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