New York, NY – August 9, 2007 – The U.S. Commodity Futures Trading Commission (CFTC) secured default orders against nine defendants in a multi-million dollar commodity futures fraud scheme. The U.S. District Court for the Southern District of New York found the entities collectively defrauded customers out of $13,834,957.21.
The orders mandate the defendants pay restitution totaling $13,834,957.21 to the victims of the fraud, as well as civil monetary penalties amounting to $1,690,000. The case stemmed from complaints filed by the CFTC against New York Options Exchange (NYOEX), Tahoe Futures (Tahoe), International Energy Exchange (INTENX), Vitol Capital Management (Vitol), New York Petroleum Option Exchange (NYPOE), HPR Commodities (HPR), American Futures and Options Exchange (AFOEX), Metro Financials (Metro), and American Futures and Options Trading Commission (AFOTC).
According to the court findings, the defendants misrepresented themselves online, falsely claiming to operate legitimate commodity futures and options exchanges and brokerage services within the United States. Customers were lured into trading energy and currency futures with promises of substantial profits. Instead, they lost nearly all of their invested funds.
A key component of the scheme involved the creation of a fictitious regulatory body, the American Futures and Options Trading Commission (AFOTC). Metro Financials fraudulently claimed that the American Futures and Options Exchange (AFOEX) was regulated by AFOTC, falsely presenting it as the sole regulator for commodity futures and options markets in the U.S. Both AFOTC and AFOEX were, in fact, fabricated entities with deceptive websites.
The court orders include permanent injunctions prohibiting all defendants from engaging in any future business activities related to commodity futures and options trading. The CFTC acknowledged assistance from numerous international regulatory bodies, including those in Australia, Germany, Hong Kong, Switzerland, Malaysia, Singapore, Czech Republic, India, Italy, and the Netherlands, as well as the New York Mercantile Exchange, the Office of Investor Education and Assistance, and the U.S. Securities and Exchange Commission.
The case was led by CFTC Division of Enforcement staff members David Oakland, Philip Rix, Nathan Ploener, Manal Sultan, Lenel Hickson, and Stephen J. Obie.
Source: CFTC.gov
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