A California man and his associated businesses have been ordered to pay $9 million following a Commodity Futures Trading Commission (CFTC) investigation into a forex trading scheme. Eshaq M. Nawabi, operating as Nawabi Enterprise, and Hyperion Consulting Inc. were found liable for fraud and have been permanently banned from trading commodities and registering with the CFTC.
The U.S. District Court for the Eastern District of California entered a consent order on April 15, 2024, requiring Nawabi and his companies to pay $4.5 million in restitution to victims and a $4.5 million civil monetary penalty. The order fully resolves a case initially filed by the CFTC on April 26, 2022, building on a previous consent order issued December 6, 2023, which established their liability and trading ban.
Between October 2019 and April 2022, Nawabi allegedly solicited investments for a forex trading pool, promising potential returns of 8-25% per month with minimal risk. He claimed to be successfully trading forex on behalf of investors and guaranteed withdrawals within 3-5 business days. However, the CFTC found that Nawabi misappropriated the pooled funds for personal use and to pay earlier investors, operating a Ponzi scheme. False account statements were generated to conceal the lack of legitimate trading activity.
Despite repeated requests, investors were unable to withdraw their funds. The CFTC warns that recovery of lost funds is not guaranteed, as wrongdoers may lack the necessary assets. The case was led by CFTC staff members Sarah Matlack Wastler, James H. Holl, III, Maura Viehmeyer, Erica Bodin, and Rick Glaser.
The CFTC urges potential investors to verify a company’s registration before investing and provides resources, including a Foreign Currency (Forex) Trading Fraud Advisory, to help identify potential scams. Information on registration status can be found using NFA BASIC.
Source: CFTC.gov
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