The CFTC obtained an order against defendants One World Capital Group, LLC of Winnetka, Ill. and John Edward Walsh, of Lake Forest, Ill., requiring each to pay a $260,000 civil monetary penalty for failing to demonstrate compliance with CFTC net capital requirements. (CFTC v. One World Capital Group, LLC, et al., N.D. Ill., Case No. 07CV 7002).
The Honorable Joan H. Lefkow of the United States District Court for the Northern District of Illinois entered the consent order of permanent injunction on February 25, 2010. The order resolves a complaint brought by the CFTC on December 13, 2007 (CFTC v. One World Capital Group, LLC, and John Edward Walsh, Civil Action No. 07 CV 7002 (N.D. Ill. filed Dec. 13, 20070, and CFTC Press Release 5424-07, December 18, 2007). The complaint charged One World, a registered futures commission merchant and forex dealer member, and its president Walsh, with inability to demonstrate compliance with capitalization requirements and with failure to maintain required books and records as required by federal commodity laws.
According to the order, Walsh admitted that he could not make the required net capital calculation because he was unable to determine One World’s current liabilities to forex customers or One World’s ability to pay its customer liabilities. The known financial accounts held in the name of One World on December 13, 2007, contained a total of only $639,815, which was at least $9 million short of the claimed liabilities to customers who maintained accounts with One World for the purpose of trading foreign currency contracts. The order also states that One World and Walsh failed to maintain books and records as required by CFTC regulations.
In a separate action on March 4, 2010, based on the facts of the federal district court case, the CFTC simultaneously filed and settled a statutory disqualification action against One World Capital Group, revoking its registrations as a futures commission merchant and commodity trading advisor.
In January 2009, Walsh was arrested on federal fraud charges in connection with the operation of One World Capital Group. In February, 2009, criminal authorities seized assets of Walsh and One World, including the funds frozen by the court in the CFTC action.