Sugar Land, Texas – January 15, 2014 – Mark E. Rice has been ordered to pay $1.5 million in restitution and penalties to settle charges of fraudulent solicitation and misappropriation of customer funds related to foreign currency trading, the U.S. Commodity Futures Trading Commission (CFTC) announced today.
Judge Lee H. Rosenthal of the U.S. District Court for the Southern District of Texas entered a Consent Order on January 13, 2014, requiring Rice to pay $827,000 in restitution and a $673,000 civil monetary penalty. The order also permanently bans Rice from trading and registering with the CFTC, and prohibits further violations of the Commodity Exchange Act.
The charges stem from a complaint filed by the CFTC on June 29, 2011, alleging that Rice operated a fraudulent scheme from June 2008, soliciting approximately $1.7 million from a single investor to trade leveraged off-exchange forex contracts.
According to the CFTC, Rice made false claims to the investor, including assurances that the investment was “risk free,” insured against loss, and guaranteed to return principal. The agency found that Rice misappropriated at least $576,000 of the customer’s funds, transferring the money to companies he controlled and using at least $404,000 for personal and business expenses.
The CFTC’s litigation against Financial Robotics, Inc., Rice’s company, is ongoing. The agency acknowledged assistance from international regulatory bodies including the National Futures Association, the British Virgin Islands Financial Services Commission, The Netherlands Authority for the Financial Markets, and the United Kingdom’s Financial Conduct Authority.
Kevin S. Webb, Michelle S. Bougas, James H. Holl, III, and Gretchen L. Lowe of the CFTC’s Division of Enforcement were responsible for the case.
The CFTC urges investors to be cautious of Forex trading scams and provides resources for identifying and reporting suspicious activity via its toll-free hotline 866-FON-CFTC (866-366-2382) or through an online form.
Source: CFTC.gov
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