A US district court in Wisconsin has ordered a commodity pool operator Kay Yang (Kay) along with her companies to pay over $24 million for retail forex fraud. They targeted members of the Hmong minority group, an indigenous group of people located in East and Southeast Asia. The payment comprises $13.6 million as a restitution payment and $10.3 million as a civil monetary penalty.

The Commodity Futures Trading Commission (CFTC ) announced the order in a statement released today (Thursday), noting that the court entered the judgment last Monday. The court also demanded that Chao Yang, Kay’s husband, pay $1.4 million of the illegal funds he received from the scheme.

Multi-million FX Trading Fraud

CFTC sued Kay and her companies, AK Equity Group LLC and Xapphire LLC in April last year, alleging that they illegally solicited at least $15.7 million from about 67 investors to participate in a commodity pool supposedly to trade forex. At the time, the Securities and Exchange Commission (SEC ) charged Kay to court in connection with the scheme.

Through the scheme, which lasted between April 2017 and March 2020, Yang and her companies “made several false representations and materials omissions,” CFTC said.

“The defendants also misappropriated at least $4.8 million of pool participants’ funds and spent that money on Yang’s personal expenses, including spending nearly $1.4 million at casinos and on luxury hotels and cars,” the CFTC explained.

CFTC Continues Crackdown on FX Fraud

The latest court order comes even as the CFTC continues to battle fraudulent and unregistered forex firms operating in the country. In late April, the derivatives watchdog charged 14 retail FX dealers and futures commission merchants for 'fraudulently claiming' to be registered with the agency. Some of the dealers, which claim to be based in the US, UK and Sweden, include Cross Trade FX, Volfxtrade, TFX Trading and Bit Trading.

Earlier in February, the CFTC sued five individuals and three associated companies for three interconnected $145 million forex trading Ponzi schemes through which they allegedly defrauded more than a thousand investors. The regulator is seeking to recover the investors’ funds and secure civil penalties against the individuals.

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