Michael S. Wright, formerly of New Jersey, was sentenced to 21 months in prison and ordered to pay $758,070 in restitution following a federal investigation into a fraudulent forex pool operation, authorities announced December 21, 2018. The case, originating in the U.S. District Court for the Southern District of New York, revealed a systematic scheme to defraud investors.
Wright, the former chief executive officer of Wright Time Capital Group LLC (d/b/a Global FX Club), pled guilty to one count of commodities fraud on October 13, 2017. The Commodity Futures Trading Commission (CFTC) filed a complaint on June 22, 2017, alleging fraudulent solicitation and misappropriation of funds from investors in the forex pool.
The court found that Wright and WTCG fraudulently solicited investments, falsely claiming funds would be used for forex trading. Instead, the funds were misappropriated, and investors were provided with false account statements inflating their returns and concealing significant losses. WTCG also failed to register with the CFTC as a Commodity Pool Operator, commingled funds, and failed to maintain the pool as a separate entity.
In addition to the prison sentence and restitution, Wright was ordered to pay a $100,000 civil monetary penalty and is subject to permanent trading and registration bans. WTCG was also ordered to pay a $1,113,750 civil monetary penalty and $371,250 in restitution, and is similarly banned from trading and registration. The total penalties and restitution levied against Wright and WTCG exceed $1.48 million.
The CFTC cautions investors that restitution orders do not guarantee full recovery of lost funds, as wrongdoers may lack sufficient assets. The agency continues to pursue legal action to protect customers and hold accountable those who engage in fraudulent activities.
Source: CFTC.gov
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