MEQUON, WI – Kay Yang of Mequon, Wisconsin, is facing charges of fraud and misappropriation following a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Eastern District of Wisconsin. The complaint alleges Yang, along with her companies AK Equity Group LLC and Xapphire LLC, operated a fraudulent off-exchange foreign currency (forex) trading scheme that defrauded at least 67 investors out of $15.7 million.
According to the CFTC, from April 2017 through March 2020, Yang solicited funds from investors with false promises of consistent positive returns and a conservative trading strategy. The complaint alleges she falsely claimed to manage hundreds of millions of dollars and to allocate 100% of investor funds to forex trading using low leverage. In reality, the defendants routinely suffered losses through high-leverage, high-frequency trading, and misappropriated investor funds for personal use.
The CFTC alleges Yang spent over $700,000 on casinos and gambling, more than $439,000 on travel and luxury hotels, and at least $248,000 on vehicles. She also allegedly transferred approximately $200,000 to her personal bank accounts, $1.4 million to accounts held by her husband, Chao Yang (named as a relief defendant), and over $1 million to joint accounts shared with her husband.
The CFTC is seeking full restitution for defrauded investors, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act.
This case is running parallel to a civil complaint filed by the Securities and Exchange Commission (SEC) against Yang. Additionally, the Wisconsin Department of Financial Institutions issued a cease and desist order against Yang in July 2020, revoking exemptions and imposing disgorgement, restitution, and civil penalties.
The CFTC received assistance in the investigation from the National Futures Association, the SEC, and the Wisconsin Department of Financial Institutions, as well as international regulators including those in Australia, The Bahamas, Sweden, and the UK.
Source: CFTC.gov
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