HOUSTON, TX – Kelvin O. Ramirez, of Houston, Texas, is facing charges of fraud, misappropriation of customer funds, and regulatory violations stemming from an off-exchange foreign currency (forex) scheme, according to a CFTC enforcement action announced February 14, 2019. A federal court has issued a preliminary injunction prohibiting Ramirez from engaging in these activities.
The Commodity Futures Trading Commission (CFTC) alleges that Ramirez defrauded over 140 clients by making false claims about his assets under management and trading activity. The complaint states Ramirez falsely asserted he had millions of dollars in assets and routinely traded forex, when evidence suggests he did not trade at all and instead absconded with client funds.
“This case shows the CFTC’s continued commitment to rooting out fraud in our markets, whether it flows through traditional avenues or new ones, like the social-media based scheme alleged here,” said James McDonald, CFTC’s Director of Enforcement. “As social media becomes more prevalent, we caution customers to perform appropriate due diligence regarding any investment solicitations they receive over those platforms.”
The preliminary injunction, issued January 29, continues a freeze of Ramirez’s assets and the preservation of records initially ordered on January 15. The CFTC’s complaint, filed January 14 in the U.S. District Court for the Southern District of Texas, details how Ramirez, beginning as early as 2015, fraudulently solicited investments in commodity pools, managed forex trading accounts, and a forex trading education service. He primarily used social media platforms like Instagram and WhatsApp to reach potential clients.
Ramirez allegedly promoted a lavish lifestyle and falsely claimed to generate hundreds of thousands of dollars in weekly profits, boasting a multi-million dollar bank balance and a large managed forex trading pool. He promised clients returns of their principal plus significant profits, while failing to disclose the inherent risks of forex trading. The CFTC asserts these were all false representations used to steal client money.
Furthermore, the complaint alleges Ramirez failed to register as a Commodity Pool Operator and Commodity Trading Advisor, violating federal regulations. The CFTC is seeking restitution for defrauded clients, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of commodities laws. The CFTC also acknowledged assistance from the St. Vincent and the Grenadines Financial Services Authority.
Source: CFTC.gov
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