Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich June 27, 2011

The CFTC announced that it has filed and settled charges against Mark Adrian related to foreign exchange (“forex”) trading fraud. The Florida-based forex trader has been ordered to pay a large civil monetary penalty, and is banned from trading on behalf of other people or registering with the CFTC in the future.

According to the CFTC, while Adrian was employed at KJW Capital Management between 2005 and 2008, he was soliciting customers to open accounts with KJW. These accounts would allow KJW to trade off-exchange forex contracts on behalf of the investor. In this way, the firm solicited $18.4 million from 58 customers, and traded those foreign exchange accounts at Adivus Trading, LLC. Adrian was also an employee at Adivus.

When participants suffered significant foreign exchange trading losses, Adrian created false bank records and statements to hide the losses. In 2008, an employee at Adivus noticed that requests for fund withdrawals were not being honored, and compared two statements. The false one had the same font, color, and account number as the real statement, but had wildly different numbers.  Instead of the account’s actual balance ($181,000), the statement showed a much larger number ($2,488,000).  Because requests to withdraw funds were not honored and statements were doctored, forex customers ended up losing at least $2.3 million.

Adrian was the principal and associated person for Adivus until he withdrew his registration in 2007. He was also registered on behalf of ten other entities, and withdrew the last of his registrations in 2009.

Adrian has been ordered to pay $140,000 in civil monetary penalties by the CFTC. He has also plead guilty to wire fraud, and is awaiting sentencing for these criminal charges. He first confessed to creating fraudulent statements back in 2008.

The release contained no information if KWJ Capital Management or Adivus would also be charged with fraud.

Read more about this CFTC enforcement action.
Creative Commons License photo credit: Jack Spades

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