MILWAUKEE, WI – David Prescott was ordered to pay $1,820,392 in restitution and penalties for defrauding investors in an off-exchange foreign currency (forex) scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced November 19, 2013. The judgment, entered by the U.S. District Court for the Eastern District of Wisconsin on October 31, 2013, also permanently bars Prescott from all commodity-related activities and registration with the CFTC.
The CFTC initially filed a civil complaint against Prescott, operating under the name Cambridge Currency Partners, on April 30, 2013. The complaint alleged that Prescott fraudulently solicited investments for a forex pool and then misappropriated $455,098 from participants between June 2010 and April 2013.
According to the court order, Prescott used the misappropriated funds for personal expenses, including air travel, hotel accommodations, and gambling. He misled investors about the risks associated with forex trading and issued demand promissory notes promising repayment with interest, despite knowing he couldn’t fulfill those obligations through trading.
Further compounding the fraud, Prescott failed to disclose his prior criminal history to investors. Court documents reveal he was previously convicted of conspiracy to commit securities fraud, mail fraud, wire fraud, and perjury. He was previously ordered to pay over $1 million in restitution and was permanently enjoined from violating anti-fraud provisions of the Securities Exchange Act, operating under the alias David Weeks.
The judgment requires Prescott to pay $455,098 in restitution to defrauded customers and a $1,365,294 civil monetary penalty. The CFTC staff members leading the investigation included Diane M. Romaniuk, Ava M. Gould, Mary Beth Spear, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
Source: CFTC.gov
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