Patrick Rakotonanahary, formerly of Punta Gorda, Florida, has been permanently banned from trading and registering with the Commodity Futures Trading Commission (CFTC) following a multi-million dollar foreign currency (forex) Ponzi scheme, according to a consent order entered November 4, 2011, by the Honorable Susan Oki Mollway of the U.S. District Court for the District of Hawaii.
The CFTC initially charged Rakotonanahary and his company, Cyber Market Group LLC (Cyber), with defrauding investors in Hawaii and across the United States. The scheme involved misappropriating customer funds for personal use, as detailed in a prior CFTC press release from March 16, 2010.
Both Rakotonanahary and Cyber were ordered to pay a $500,000 civil monetary penalty. Additionally, a related criminal action resulted in Rakotonanahary being ordered to pay $3,473,562.56 in restitution to the victims of the scheme.
Court findings reveal that, beginning in June 2008, Rakotonanahary and Cyber falsely promised clients weekly returns of four to ten percent on their forex investments. These promises were knowingly false, as the defendants lacked the necessary funds and instead relied on funds from new investors to pay existing clients – a hallmark of a Ponzi scheme.
The defendants also provided clients with misleading statements regarding the balance of their accounts and Rakotonanahary directly misappropriated client funds for his own personal expenses. The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the District of Hawaii, the Federal Bureau of Investigation, and the Hawaii Department of Commerce and Consumer Affairs in bringing the case to resolution.
The case was led by CFTC Division of Enforcement staff members Elizabeth C. Brennan, Philip D. Rix, Steven Ringer, Lenel Hickson, Stephen J. Obie, and Vincent McGonagle.
Source: CFTC.gov
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