The Commodity Futures Trading Commission (CFTC) has revealed its civil enforcement action against Eddy Alexandre and his company, EminiFX, Inc. The regulator charged them with fraudulent solicitation and misappropriation in scheme involving forex, commodity futures contracts, and cryptocurrencies.
According to CFTC’s complaint, the defendants solicited $59 million from hundreds of people to purportedly trade forex and cryptocurrencies, as well as futures and options, in an investment club. This scheme was conducted since last September 2021 to present.
The regulator found that EminiFX and Eddy Alexandre guaranteed customers returns of 5% per week. The company used only $9 million of customers’ funds to trade forex and crypto in an account in Alexandre’s name. He lost almost 70% of that amount (approximately $6.2 million) through unprofitable trading and fees.
Additionally, the defendants misappropriated substantial amounts of the remaining customer funds by sending it to accounts in Alexandre’s name. He used the money to pay other customers in a Ponzi-like scheme, and for his personal expenses. He used client money to make payments to BMW, Mercedes Benz, and Saks Fifth Avenue. He also paid with them for flights, luxury hotels, clothing, and occupational and physical therapy. A substantial amount of customer money was also used to rent and furnish office space for EminiFX and to host “galas” on behalf of the company, which the defendants used to solicit additional contributions from participants.
The US court has issued an order freezing assets the defendants controlled. The CFTC seeks restitution to defrauded investors, disgorgement, monetary penalties and permanent trading and registration bans.
The CFTC also noted that there is a parallel criminal and civil action against the defendants being conducted.
Last month, the SEC and CFTC made charges in off-exchange forex trading scheme in which they solicited $15.7 million.
