Tae Hung Kang, also known as Kevin Kang, of Queens, New York, has been permanently banned from trading and soliciting after a judgment was entered against him by the U.S. District Court for the Eastern District of New York on August 31, 2022. The Commodity Futures Trading Commission (CFTC) brought the action, initially filed in September 2015, alleging Kang engaged in fraudulent solicitation and misappropriated customer funds.
The CFTC’s complaint detailed how Kang, while CEO of Safety Capital Management, Inc., doing business as ForexnPower, fraudulently solicited over $1.5 million from customers for off-exchange foreign currency trading. He is accused of misappropriating more than $800,000 of those funds. The investigation revealed Kang made false and misleading representations in advertisements placed in Korean-language newspapers to attract investors.
The court order requires Kang to pay $835,058 in restitution to the victims of the scheme. He is permanently prohibited from violating the Commodity Exchange Act (CEA) and CFTC regulations, and barred from future registration or trading activities.
Between October 2010 and December 2013, Kang allegedly represented to potential investors that a $3,000 investment through ForexnPower could yield over $900,000 in profits within five years. The CFTC found this claim to be false, as the majority of customers lost money trading with the company and no customer achieved such returns. He also allegedly told a customer the company was generating 10% monthly profits, describing it as a “lifetime opportunity,” and then stalled a withdrawal request with promises of payment from another investor – a tactic consistent with a Ponzi scheme.
The CFTC advises that restitution orders do not guarantee full recovery of lost funds, as wrongdoers may lack sufficient assets. The agency states it will continue to pursue accountability for those who harm customers.
In a parallel criminal case, United States v. Kang, et al., Kang was indicted in April 2018 on charges of wire fraud conspiracy, securities fraud conspiracy, and money laundering conspiracy. He pleaded guilty to securities fraud conspiracy on March 30, 2021. The CFTC’s action against other defendants named in the original 2015 complaint – Sungmi Kang, John Won, and GNS Capital Inc. – remains ongoing.
Source: CFTC.gov
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