BOCA RATON, FL – Jayson Kline, along with Charles Fremer and Edward Johnson, were found liable for defrauding customers of Gibraltar Monetary Corporation in a foreign currency options scheme, a U.S. District Court judge ruled on May 30, 2006. The judgment, issued by Judge William P. Dimitrouleas of the Southern District of Florida, follows an eight-day trial initiated by a complaint filed by the Commodity Futures Trading Commission (CFTC) on February 10, 2004.
The CFTC alleged that beginning in May 2002, Gibraltar, Kline, Fremer, Johnson, and compliance manager Thomas Clancey fraudulently solicited retail investors to trade foreign currency options through Forex Capital Markets, LLC (FXCM). The scheme failed to disclose Kline’s prior history of solicitation fraud, including a federal court injunction and a CFTC cease and desist order issued in 1993.
The court found that Gibraltar and its employees repeatedly made false and misleading statements regarding the potential for profit in foreign currency options trading, while concealing the fact that approximately 95% of their customers lost the majority, if not all, of their investments. Kline was also found to have violated the terms of the previous CFTC cease and desist order.
Judge Dimitrouleas ordered Kline, Fremer, and Johnson to collectively repay $2,752,337.50 to defrauded customers. Additionally, a total of $783,378 in civil penalties was imposed on the three individuals. All three defendants are permanently prohibited from engaging in any further commodity-related activity.
The complaint indicated that roughly $3 million in customer funds were traded through FXCM, which earned over $800,000 in commissions from the accounts introduced by Gibraltar. However, Judge Dimitrouleas determined that FXCM was not liable as a principal for the misrepresentations made by Gibraltar. The CFTC and the defendants have until July 31, 2006, to file any appeals of the judgment.
Source: CFTC.gov
Related Federal Cases
- Orlando Pascual Jr., HIV Treatment Medicare Fraud, Miami FL, 2023 · Mississippi
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2023 · Texas
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2024 · Florida
- Alton Plunkett, Tax Fraud, New York NY, 2023 · New York
- Letitia James, Tax Fraud and Bribery, New York 2023 · New York
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News