Stuart, Florida resident David R. Lynch has been ordered to pay $171,297 in restitution and a $300,000 civil penalty for defrauding investors in a foreign currency (forex) trading scheme, the Commodity Futures Trading Commission (CFTC) announced on December 12, 2013.
The CFTC’s order details that between December 2008 and July 4, 2013, Lynch operated a commodity pool, collecting at least $348,450 from 14 investors. He falsely claimed to earn up to 7% monthly through forex trading, guaranteeing principal protection and immediate fund access – promises he couldn’t keep.
According to the CFTC, Lynch only deposited a portion of the collected funds into trading accounts, and those trades were largely unsuccessful. He then misappropriated over $126,000 of investor money, using it for personal expenses and to pay earlier investors – effectively operating a Ponzi scheme. Monthly account statements were fabricated to show consistent, false profits to conceal the losses and misappropriation.
The CFTC order mandates Lynch cease all violations of the Commodity Exchange Act and related regulations. He is permanently banned from trading, registering with the CFTC, and engaging in other commodity-related activities. Lynch was never registered with the CFTC.
Glenn I. Chernigoff, Alison B. Wilson, Kara L. Mucha, and Gretchen L. Lowe of the CFTC’s Division of Enforcement led the investigation.
Customers are encouraged to report suspicious activity to the CFTC via its toll-free hotline at 866-FON-CFTC or through an online form. The CFTC offers fraud advisories, including specific warnings about commodity pool fraud, available on its website.
Source: CFTC.gov
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