The Commodity Futures Trading Commission in the US (CFTC) confirmed yesterday that it has filed a civil enforcement action against Eddy Alexandre, a resident of Valley Stream, New York in a fraudulent FX scheme worth $59 million.
The US authority has taken similar actions against Alexandre’s company, EminiFX Inc. The details shared by the CFTC show that Alexandre promised a weekly return of 5% to investors and took at least $59 million from hundreds of people to trade foreign exchange and crypto-assets.
CFTC noted that Alexandre only used 9% of customers’ funds to trade FX and cryptocurrencies. He lost $6.2 million, approximately 70% of the amount, through unprofitable trading and fees. Alexandre used clients’ funds for his personal expenses as well.
“The complaint alleges the defendants also misappropriated substantial amounts of the remaining customer money by sending it to accounts in Alexandre’s name, using it to pay other customers in a Ponzi-like scheme, and using it for Alexandre’s personal expenses. For example, Alexandre used participant funds to make payments to BMW, Mercedes Benz and Saks Fifth Avenue. Payments were also made for flights, luxury hotels, clothing and occupational and physical therapy. Alexandre also used substantial participant funds to rent and furnish office space for EminiFX and to host 'galas' on behalf of EminiFX,” the CFTC noted.
FX Fraud Advisories
FX and crypto fraud has started rising again in the US. To warn investors against fraudulent activities, the CFTC issued several FX Fraud Advisories in the past. Moreover, the authority urged investors to check the registration of an individual or the company with the CFTC to evaluate their credibility.
“The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory and the Forex Fraud Advisory, which alert customers of these types of fraud and list simple ways to spot them and inform the public of possible risks associated with investing or speculating in virtual currencies or recently launched Bitcoin futures and options,” the CFTC added.
