CFTC, ZTegrity discuss possibility of settlement
About two months after the Commodity Futures Trading Commission (CFTC) announced that it had brought charges against Troy Mason and his Texas-based company, ZTegrity Inc, it has become clear that the parties in the case have engaged in settlement talks.
According to a document filed by the CFTC at the Texas Southern District Court earlier this week, the parties have discussed the possibility of settlement and believe that a negotiated resolution could potentially be available in the future.
“Any such resolution, however, likely would require additional discovery that allows Plaintiff to independently verify pool participants, the amounts each pool participant contributed, the amounts each pool participant was repaid (if any), Defendants’ use of pool participants’ funds, and the source of any purported profits,” the CFTC explains. Put otherwise, the CFTC and the defendants may need additional time to sort these matters out.
According to the CFTC complaint, from at least October 2019 to the present the defendants used various websites and social-media platforms to fraudulently market their Forex trading pool as a version of a savings account that offered a greater yield with similarly low or no risk. The defendants called the pool “The Black Club” and “The Forex Savings Club,” which their website claimed had received over $460,000 from 411 participants.
The complaint further alleges the defendants induced participation in their Forex trading pool by falsely claiming to “guarantee” to repay participants the funds they contributed to their individual “Forex Savings Accounts” and falsely offered participants “with a 100% certainty” portions of the “substantial profit[s]” to be generated using participants’ pooled funds to trade forex.
Rather, as alleged in the complaint, the defendants knew or recklessly failed to appreciate that no forex trader can guarantee profitable trading, or the avoidance of losses required to guarantee all participants’ contributions, and knew, but failed to inform participants that they had no U.S.-based forex trading accounts.
In its continuing litigation, the CFTC seeks full restitution to defrauded clients, disgorgement of any ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the CEA, as charged.