Washington, D.C. – Kevin G. White was implicated in a fraudulent foreign currency exchange scheme and has faced both civil and criminal penalties, according to a U.S. Commodity Futures Trading Commission (CFTC) announcement made on September 8, 2015.
The CFTC filed and settled charges against Forex Capital Markets, LLC (FXCM) for failing to adequately supervise its employees and agents regarding accounts linked to Revelation Forex Fund, LP (RFF), a fraudulent entity operated by White and associated companies. The CFTC originally sued White and his entities on July 9, 2013, alleging a fraudulent scheme. A permanent injunction was subsequently entered against them on April 6, 2015.
Further compounding the legal repercussions, White was sentenced to over eight years in prison on February 26, 2015, following a criminal conviction for mail fraud. The CFTC’s investigation revealed that between April 1, 2013, and July 10, 2013, FXCM neglected to adhere to its own compliance protocols, specifically those requiring thorough customer identification and reporting of suspicious activity.
Despite recognizing warning signs indicating RFF was a fraudulent operation, FXCM failed to identify or report them, violating internal procedures. The company also failed to address White’s operation of websites associated with his entities, which violated his exemption from registering as a commodity pool operator. Additionally, FXCM did not fully comply with a CFTC document request, violating a prior Commission order.
As a result of the CFTC Order, FXCM is required to pay a $700,000 civil monetary penalty and disgorge $143,922.50 in commissions and fees earned from the RFF accounts. The company must also engage a third-party compliance consultant to review and report on the supervisory issues highlighted in the Order.
Source: CFTC.gov
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