Washington, D.C. — The Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the U.S. District Court for the Southern District of New York against Eddy Alexandre of Valley Stream, New York, and his company, EminiFX, Inc., of Valley Stream and Manhattan, New York, charging them with fraudulent solicitation and misappropriation in connection with soliciting clients to trade foreign currency exchange (forex), commodity futures contracts, and cryptocurrencies.
On May 11, 2022, U.S. District Court Judge Valerie E. Caproni signed an ex parte statutory restraining order freezing assets the defendants controlled, preserving records, and appointing a Temporary Receiver. A hearing on the CFTC’s Motion for Preliminary Injunction is scheduled for May 24, 2022.
In its continuing litigation, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA).
Case Background
The complaint alleges that since at least September 2021 to the present, the defendants solicited and accepted at least $59 million from hundreds of people to purportedly trade forex and cryptocurrencies, as well as futures and options, in an investment club. The defendants guaranteed customers returns of 5% per week. In fact, the defendants’ used only approximately $9 million of customers’ funds to trade forex and cryptocurrency in an account in Alexandre’s name. Alexandre lost nearly 70% of that amount —approximately $6.2 million—through unprofitable trading and fees.
The complaint alleges the defendants also misappropriated substantial amounts of the remaining customer money by sending it to accounts in Alexandre’s name, using it to pay other customers in a Ponzi-like scheme, and using it for Alexandre’s personal expenses. For example, Alexandre used participant funds to make payments to BMW, Mercedes Benz, and Saks Fifth Avenue. Payments were also made for flights, luxury hotels, clothing, and occupational and physical therapy. Alexandre also used substantial participant funds to rent and furnish office space for EminiFX and to host “galas” on behalf of EminiFX, which the defendants used to solicit additional contributions from participants.
Parallel Criminal and Civil Action
On May 12, 2022 in a separate action, the U.S. Attorney’s Office for the Southern District of New York announced the filing of a parallel matter for related conduct.
The Division of Enforcement thanks and acknowledges the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation.
The Division of Enforcement staff members responsible for this case are Douglas Snodgrass, Matthew Edelstein, Heather J. Dasso, Ray Lavko, Elizabeth M; Streit, Scott Williamson and Robert Howell.
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CFTC’s Commodity Pool and Forex Fraud Advisories
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory and the Forex Fraud Advisory, which alert customers these types of fraud and list simple ways to spot them, and to inform the public of possible risks associated with investing or speculating in virtual currencies or recently launched Bitcoin futures and options.
The CFTC also strongly urges the public to verify a company’s or individual’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company or individual. A company’s or individual’s registration status can be found using NFA BASIC.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.
Source: CFTC
