Alex Ekdeshman of Holmdel, New Jersey, has been ordered to pay $2,483,000 in restitution and penalties for perpetrating a forex fraud scheme, according to a federal court order entered on September 9, 2013. The U.S. Commodity Futures Trading Commission (CFTC) obtained the consent order from U.S. District Judge Colleen McMahon of the Southern District of New York.
The CFTC initially filed a complaint against Ekdeshman and his company, Paramount Management, LLC, on June 26, 2013, alleging solicitation fraud and misappropriation of customer funds. The complaint detailed a scheme that defrauded approximately 110 retail customers out of more than $1.3 million. Ekdeshman solicited funds with the promise of leveraged foreign currency (forex) trading through unregistered offshore counterparties.
Customers were led to believe that accounts would be opened and actively traded on their behalf. Ekdeshman and Paramount touted a purported 20-month track record of average monthly returns of 4.6% based on a proprietary trading system. However, the court found that no customer accounts were ever actually managed or traded. Customers neither purchased forex nor received any profits.
Instead, the court determined that Ekdeshman misappropriated the vast majority of customer funds for personal use and business expenses. False account statements were issued to conceal the fraud, as no legitimate accounts existed and no profits were ever generated. The $2,483,000 penalty includes $1,146,000 in restitution to the defrauded customers and a $1,337,000 civil monetary penalty.
The order also imposes permanent trading and registration bans, prohibiting Ekdeshman and Paramount from violating anti-fraud provisions of the Commodity Exchange Act. The CFTC received assistance in the investigation from financial regulatory bodies in the United Kingdom, Mauritius, and South Africa, as well as from agencies within the United States including the Wisconsin Department of Financial Institutions, the National Futures Association, and the Federal Trade Commission.
Source: CFTC.gov
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