AUSTIN, TX – The U.S. Commodity Futures Trading Commission (CFTC) has secured a consent order against Michel Geurkink, Emad Echadi, and IB Capital FX, LLC, stemming from an unregistered forex trading scheme that defrauded approximately 1,850 customers worldwide, including those in the United States. The order, entered by Judge Lee Yeakel of the U.S. District Court for the Western District of Texas, mandates the defendants, jointly and severally, to pay $35 million in restitution and a $420,000 civil monetary penalty.
The CFTC alleges that between January 1, 2012, and September 18, 2012, IB Capital, a New Zealand-based company, and its principals, Geurkink and Echadi – both citizens of the Netherlands – solicited over $50 million from customers for off-exchange margined retail foreign currency (forex) trading without proper registration with the CFTC. While the defendants returned approximately $51.6 million to customers through redemptions and refunds, they retained an illicit gain of $35 million, according to the court order.
The case originated from a CFTC enforcement action filed on November 9, 2015. The complaint detailed the defendants’ unlawful offering of forex agreements and contracts to retail customers without the required registration, a violation considered a serious threat to the integrity of the financial industry.
Notably, Geurkink and Echadi are also facing criminal prosecution in the Netherlands by the Dutch Public Prosecutor’s Office for related fraudulent activities. The CFTC investigation received assistance from multiple international regulatory bodies, including authorities in Australia, the United Kingdom, Hungary, New Zealand, and the Dutch Ministry of Security and Justice.
The CFTC warns that the recovery of funds for defrauded customers is not guaranteed, as the defendants may lack sufficient assets to cover the restitution. The agency remains committed to protecting customers and holding those who violate the Commodity Exchange Act accountable for their actions.
Kyong J. Koh, Elizabeth C. Padgett, Mary Q. Lutz, Timothy J. Mulreany, and Paul G. Hayeck of the CFTC’s Division of Enforcement led the investigation.
Source: CFTC.gov
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