Miami, FL – Michael Alcocer, a U.S. citizen, has been ordered to pay over $38.4 million in restitution and penalties for perpetrating a fraudulent foreign currency (forex) trading scheme, the Commodity Futures Trading Commission (CFTC) announced today. The federal court order, issued on April 5, 2013, by Judge Joan A. Lenard of the U.S. District Court for the Southern District of Florida, also permanently bans Alcocer and his company, InovaTrade, Inc., from trading and registering with the CFTC.
The charges stem from a CFTC complaint filed on September 21, 2012, alleging solicitation fraud, false statements, and misappropriation of funds. Between November 2008 and September 2011, Alcocer and InovaTrade allegedly induced over 400 customers to deposit more than $10.6 million to trade forex through InovaTrade, which operated as a purported Retail Foreign Exchange Dealer (RFED).
According to the order, InovaTrade fraudulently solicited customers through its website and third-party brokers, both within the U.S. and internationally. The company managed some customer accounts while also allowing customers to manage their own. Investigators found that Alcocer and InovaTrade sent customers false statements detailing their trading activity and misappropriated over $9.6 million in customer funds.
This case is part of a larger nationwide crackdown on forex fraud by the CFTC. The agency initially sued InovaTrade in January 2011 in the U.S. District Court for the Western District of Missouri for failing to register as an RFED, securing a permanent injunction in July 2011 that prevented the company from operating with U.S. customers. The recent order found that InovaTrade falsely told customers the previously sued entity was different, and that starting in August 2011, the company refused to fulfill customer withdrawal requests, ultimately closing operations in October 2011.
The CFTC acknowledged the assistance of the Panama Superintendencia del Mercado de Valores (SMV) in the investigation. The case was led by CFTC Division of Enforcement staff including Margaret Aisenbrey, Jenny Chapin, Stephen Turley, Mary Lutz, Charles Marvine, Rick Glaser, and Richard Wagner. The order was issued on April 5, 2013, and announced publicly on April 17, 2013.
Source: CFTC.gov
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