The Commodity Futures Trading Commission (CFTC) announced that Judge Carlos E. Mendoza of the U.S. District Court for the Middle District of Florida has issued a default judgment against Avinash Singh and his company, Highrise Advantage, LLC. The judgment grants a permanent injunction and imposes monetary sanctions in connection with a multi-level, multi-million dollar off-exchange foreign currency (forex) scheme.
Default Judgment Shuts Down Highrise Advantage Forex Scheme
The civil enforcement action, initiated by the CFTC on September 9, 2020, targeted Singh, Highrise, and eight other defendants. The court's order has now concluded the case, finding that Singh engaged in fraudulent solicitation and the misappropriation of funds through the master commodity pool, Highrise, as well as four feeder commodity pools. On top of that, Singh and the Highrise firm failed to register with the CFTC as required, thereby violating regulatory requirements pertaining to the operation of commodity pools.
The default judgment and permanent injunction prohibit Singh as well as Highrise from engaging in conduct that violates the Commodity Exchange Act and CFTC regulations. Furthermore, they are both ordered to pay a total of $25,558,594 in restitution and $76,675,782 in civil monetary penalties. Additionally, the court has permanently banned Singh and Highrise from registering with the CFTC and participating in trading on any registered entity.
The court's order revealed that Singh and Highrise collected nearly $58 million from investors and feeder funds. However, less than $2.5 million was used for actual forex trading, with over $25 million misappropriated. Investor funds were utilized for Ponzi-type payments and personal expenses, while false statements showing profits and no losses were sent to investors and feeder funds.
Notably, on July 5, 2023, the court entered consent orders against the operators of the four feeder commodity pools: SR&B Investment Enterprises, Inc., Green Knight Investments, LLC, Bull Run Advantage, LLC, and King Royalty, LLC. These consent orders resolve the litigation fully.
Ponzi Scheme Fallout: Galles Entities Slapped with $20 Million Fine
Finance Magnates previously reported that a federal court has ruled in the case of Phillip Galles and his associated entities, including Tyche Asset Management LLC, to pay over $20 million. This ruling is in response to their involvement in orchestrating a Ponzi scheme within the commodity pool sector. The court's decision, as detailed by Finance Magnates, found Galles liable for defrauding investors, misappropriating funds for personal use, and making false claims of extraordinary returns.
The CFTC also found Galles liable for defrauding investors, diverting funds for personal use, and making false claims of extraordinary returns. The court's decision imposes a substantial financial penalty and enforces a permanent trading ban on regulated markets to prevent future violations. The CFTC issued a cautionary note that repayment orders may not guarantee the recovery of lost funds.
