Washington, D.C. – The Commodity Futures Trading Commission (CFTC) has filed an enforcement action against MXBK Group S.A. de C.V., a Mexican financial services holding company, and its forex trading division, MBFX S.A., alleging a multi-million dollar fraud scheme targeting U.S. investors.
The complaint, filed in the U.S. District Court for the District of Utah on December 7, 2010, accuses MXBK Group and MBFX S.A. of issuing false customer statements and misrepresenting trading results on their website. The CFTC alleges the companies accepted at least $28 million from over 800 U.S. customers beginning in 2005, intending to trade forex on their behalf in pooled accounts.
From June 2008 through April 2009, the defendants are accused of falsely reporting profits to customers while actually incurring losses totaling approximately $19.4 million. In at least eight months during this period, the companies allegedly reported profits despite experiencing substantial trading losses, often exceeding $1 million monthly.
The CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, a full accounting of the defendants’ assets and liabilities, and permanent bans from trading and registration. They also request permanent injunctions to prevent further violations of federal commodities laws.
This case is the result of a joint investigation conducted by the CFTC, the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), and the Securities and Exchange Commission (SEC). The SEC filed a related action on November 30, 2010, in the same district court, SEC v. Oram, alleging securities law violations by three U.S. residents connected to the MXBK and MBFX enterprise.
The CFTC staff members leading the investigation include William Janulis, Theodore Polley, Melissa Glasbrenner, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Source: CFTC.gov
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