Ulysis K. Starling, of Dallas, Texas, has been permanently banned from the commodities market after being found liable for forex fraud, according to a judgment entered by Judge Paul A. Engelmayer of the U.S. District Court for the Southern District of New York on September 17, 2012.
The Commodity Futures Trading Commission (CFTC) filed a complaint against Starling and his company, ProfitStars Intl, Corp., on October 31, 2011, alleging anti-fraud violations. The court found that ProfitStars and Starling failed to disclose crucial information to investors in a foreign currency (forex) pooled investment vehicle.
Specifically, the court determined that ProfitStars operated the forex pool account under its own name instead of a legally required separate entity. Further, pool funds were used to trade against Paragon FX Enterprises, LLC, an unregistered retail foreign exchange dealer, violating the Commodity Exchange Act (CEA) and CFTC regulations. The court also found that ProfitStars improperly claimed a disclosure exemption.
The judgment also cited ProfitStars’ failure to notify the National Futures Association (NFA) that its claimed disclosure exemption was invalid. Starling was held liable as a controlling person for ProfitStars’ violations.
As a result of the judgment, Starling and ProfitStars are barred from engaging in any further unlawful conduct and are required to pay $280,000 in civil monetary penalties. They are also permanently prohibited from trading commodities and registering with the CFTC.
This case was one of three related actions taken by the CFTC on October 31, 2011, to enforce new forex regulations that went into effect on October 18, 2010. These regulations require registration with the CFTC for entities participating in the retail forex market and aim to protect the public.
The CFTC acknowledged the significant assistance provided by the NFA in this matter. The case was handled by CFTC staff members Peter Haas, Danielle Karst, Kyong Koh, Jessica Harris, Paul Hayeck, and Joan Manley.
The judgment was announced on September 21, 2012.
Source: CFTC.gov
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