CFTC Charges Angel Collazo and ACJ Capital, Inc. with Solicitation Fraud and Issuing False Statements in Forex Scheme

Federal court issues order freezing defendants’ assets and protecting books and records.

Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a complaint charging Angel Fernando Collazo of Salinas, Puerto Rico, and his company, ACJ Capital, Inc. (ACJ), with fraudulently soliciting at least $1.7 million from at least 18 individuals to trade off-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term leveraged foreign currency (Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) contracts and issuing false statements to conceal trading losses.

On the same day the complaint was filed under seal, May 4, 2011, Judge José A. Fusté of the U.S. District Court for the District of Puerto Rico issued an emergency order, also under seal, freezing the defendants’ assets and prohibiting the destruction of books and records.

The CFTC complaint alleges that Collazo and ACJ fraudulently solicited customers to trade forex through accounts managed by Collazo. In soliciting customers, Collazo allegedly falsely claimed that ACJ’s trading program was profitable, created the false impression that ACJ was a successful and experienced forex firm and minimized and failed to disclose fully the risks of trading leveraged forex. Customers granted Collazo authority to trade their accounts, and his trading on customers’ behalf resulted in consistent losses, according to the complaint.

As part of the fraud, Collazo allegedly misled customers regarding the performance of their investments and assured customers that their investments were performing well, despite the losses. Collazo created and sent customers false trading account statements that concealed the extent of losses in their accounts, according to the complaint. When ACJ’s customers noticed that their accounts appeared to show losses, Collazo falsely told them that their online account statements were inaccurate due to a computer malfunction, according to the complaint. Collazo then allegedly told customers that he had access to their “true” account balances and sent them false account statements that reflected positive ending balances.

In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of the federal commodities laws.

On May 4, 2011, Collazo was indicted for wire fraud and commodities fraud by the United States Attorney’s Office for the District of Puerto Rico.

The CFTC appreciates the assistance of the U.S. Attorney’s Office of the District of Puerto Rico and the United States Marshals Service.

The CFTC Division of Enforcement staff members responsible for this case are Kara Mucha, Jeremy Christianson, James A. Garcia, Michael Solinsky, Gretchen L. Lowe and Vincent A. McGonagle.

The Complaint here and the Order here.

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