Dallas, TX – On September 30, 2009, the U.S. Commodity Futures Trading Commission (CFTC) secured an emergency court order to freeze the assets of Scott P. Kear, Sr., Jeffrey L. Lyon, and companies M25 Investments, Inc., and M37 Investments, LLC, all based in Waxahachie, Texas, along with David G. Seaman of Arlington, Texas. The order also prevents the destruction of records and appoints a receiver to locate assets and determine the amounts owed to customers.
The CFTC filed an anti-fraud enforcement action on September 29, 2009, in the U.S. District Court in Dallas, alleging the defendants fraudulently obtained at least $8 million from approximately 224 customers through the trading of foreign currency (forex), forex options, and commodity futures contracts. The alleged scheme operated out of offices in Texas, West Virginia, and Mississippi.
According to the CFTC complaint, the defendants targeted vulnerable individuals, including many elderly customers who knew each other through church communities in West Virginia, Mississippi, Texas, Maryland, and other states. They are accused of falsely guaranteeing monthly returns of 2 percent and annual returns of 24 percent, while falsely portraying themselves as successful forex traders.
The CFTC alleges the defendants failed to disclose that a significant portion of customer funds would not be used for trading and that, as of March 31, 2009, they lacked the assets to fulfill promised profits or return principal. Trading losses were concealed through the issuance of false monthly statements, which falsely indicated customers were earning a consistent 2 percent return.
M25 Investments and the individual defendants also face charges of registration violations for operating a commodity futures trading pool without proper CFTC registration. A hearing is scheduled for December 22, 2009, at 10:00 a.m. before Judge Barbara M.G. Lynn to determine whether a preliminary injunction should be issued.
Customers are encouraged to contact Receiver Kelly Crawford at (214) 706-4200 or visit www.solidcounsel.com. The CFTC is seeking a permanent injunction, restitution, disgorgement of ill-gotten gains, civil monetary penalties, and permanent trading bans against the defendants as part of its ongoing litigation.
Source: CFTC.gov
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