CFTC Obtains Enforcement Action Against Florida Firm for $11.4m FX Fraud

CFTC Obtains Enforcement Action Against Florida Firm for $11.4m FX Fraud

The U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Charlene Edwards Honeywell of the U.S. District Court for the Middle District of Florida, entered an order requiring David Merrick, previously of Apopka, Fla., and his company, Trader’s International Return Network (TIRN) to pay a civil penalty of over $11.4 millon for fraud connected to foreign currency trading programs. According to the CFTC press release, the fraud victimized more than 700 customers.

The CFTC order, entered on January 22, 2013, originated from a complaint filed by the CFTC in 2009, which charged the defendants with solicitation fraud and misappropriation of customer funds totaling at least $22.5 million. The complaint alleged that Merrick and his company provided customers and prospective customers with written and electronic documents that contained false and misleading statements and omissions regarding the true investment of customer funds, risks of trading, and profits achieved.

Related CFTC FX Fraud Cases

Previously, the court entered consent orders of permanent injunction against Merrick on April 22, 2010 and TIRN on September 8, 2010, finding that the company violated the anti-fraud provisions of the Commodity Exchange Act. Both orders reserved monetary sanctions issues for a future order.

In a parallel criminal action, Merrick was also found guilty of one count of conspiracy to commit wire fraud, money laundering and securities fraud, and one count of money laundering.

Merrick was convicted January 19, 2012 on fraud charges, and sentenced to 97 months imprisonment, ordered to pay $11,437,573.15 in restitution to 735 customers and victims.

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About The Author

Felix Shipkevich

Felix Shipkevich

Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.

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