The US Commodity Futures Trading Commission (CFTC) announced on Tuesday that it has filed a civil enforcement action against an unregistered Forex firm based in Michigan and its owner, Ali Bazzi. According to the press release, Welther Oaks, LLC and Bezzi were charged with fraud and misappropriation tied to the operation of a forex commodity pool.
Authorities noted that Bazzi solicited fraudulently at least $470,000 in March 2018 from almost 25 pool participants to trade forex allegedly. The owner of Welther Oaks, LLC, promised investors high returns on their respective investments, receiving 'guaranteed profits' as high as 15% monthly without risk of losses. Also, Bazzi told customers that they could withdraw their funds at any time.
“The complaint further alleges that Bazzi and Welther Oaks used only a small fraction of the funds they collected to trade forex and concealed their fraud by issuing false account statements to the pool participants that purported to show trading profits. In addition, the complaint alleges that defendants misappropriated at least $387,000 of participants’ funds to spend on automobiles, jewelry, retail purchases, meals and entertainment and travel for Bazzi,” the CFTC noted.
Bazzi Entered a Guilty Plea in a Parallel Criminal Action
That said, the CFTC, which filled the charges in the Eastern District of Michigan, is seeking disgorgement for ill-gotten gains, civil monetary penalties, restitution, permanent registration, trading bans. Moreover, it is filing a permanent injunction against further violations of the Commodity Exchange Act (CEA) and the watchdog’s regulations. Furthermore, in a parallel criminal action against Bazzi, the CFTC stated that he entered a guilty plea today.
“The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable,” the authority added.
In a recent case reported by Finance Magnates, the CFTC entered a consent order against three individuals related to a cryptocurrency scheme.
