US Court Hits FX and Binary Options Pool Fraud with $29M in Penalty

A US court has granted the CFTC’s motion of default judgment against forex and binary options pool fraud and the operators, slapping them with more than $29 million in restitution and penalties.

Announced recently, John D. Black, based in California, operated the fraudulent scheme with his three affiliated entities, Financial Tree, Financial Solution Group and New Money Advisors. Other scheme associates were Christopher Mancuso and Joseph Tufo, along with John P. Glenn from Colorado and his law firm, The Law Firm of John Glenn, P.C.

According to the court order, the scheme was operating from 15 June 2015 to 15 June 2020. The defendants solicited the pool participants to invest in the 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 and binary options pool trading scheme but mostly misappropriated the proceeds for personal use. Further, the scheme and its operators made Ponzi-styled payments and even published false statements to justify the inability to return the funds or the promised profits.

They did not even register themselves as commodity pool operators (CPOs) or associated persons (APs) of CPOs, which is mandatory to operate such businesses.

The court order found the defendants liable for solicitation fraud, along with violation of CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term regulations and failure to comply with CPO rules.

Heavy Fines

Now, the court order requires all the entities and individuals, except Tufo, to pay nearly $10.5 million in restitution jointly and severally. Tufo has been ordered to over $4.5 million of that restitution jointly and severally with the other defendants. They further need to disgorge over $2.6 million, which was received from the scheme.

Moreover, the order imposes heavy civil monetary penalties on all of them: around $5.4 million on Black and his three affiliates, $12.1 million on Mancuso, $680,000 on Tufo, and $850,000 on Glenn and his law firm.

Last week, the CFTC flagged 34 forex and binary options investment platforms that are offering services in the US illegally without any authorizations. Furthermore, these platforms are purported to be frauds.