Miami, FL – Joseph Arsenault and several associated companies and individuals were penalized over $4.1 million by the U.S. District Court for the Southern District of Florida on August 21, 2009, for defrauding retail customers in a foreign currency (forex) scheme. The Commodity Futures Trading Commission (CFTC) brought the enforcement action in June 2004, alleging fraudulent practices related to the offering of illegal forex contracts.
The CFTC secured consent orders against Arsenault, as well as Graystone Brown Financial Inc. (Graystone), STG Global Trading Inc. (STG), Andrew Stern, and QIX, Inc. (QIX). These orders permanently bar QIX, Graystone, and STG from any involvement in commodity-related activities. Arsenault and Stern are permanently prohibited from engaging in commodity trading on behalf of others or soliciting funds for such trading.
The court found that from August 2003 through June 2004, Graystone and STG, through their account executives, fraudulently solicited customers into off-exchange forex options transactions with QIX acting as the counterparty. Customers lost at least $1,826,929.50, and the vast majority of those who opened accounts with Graystone and STG suffered trading losses.
Penalties were assigned as follows: QIX was ordered to pay $2 million, Graystone $1 million, STG $500,000, Arsenault $415,000, and Stern $270,000. The orders also prevent all defendants from seeking registration or acting in any capacity for a registered commodity trading entity. Arsenault was held liable as the controlling person of Graystone, while Stern was held accountable as the controlling person of QIX. STG was found liable for the fraudulent actions of its account executives.
The CFTC acknowledged the support of the Florida State Office of Financial Regulation in the investigation. The case was led by CFTC Division of Enforcement staff members Peter M. Haas, Eugene Smith, Kyong J. Koh, Christopher Giglio, Paul G. Hayeck, and Joan Manley.
Source: CFTC.gov
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