CFTC argues Forex scam Capital Storm should be held in contempt
Several months after the Commodity Futures Trading Commission (CFTC) launched an action against fraudulent Forex scheme Capitalstorm LLC (Capital Storm), as well as a number of entities and individuals involved in it, the regulator has informed the North Carolina Western District Court that the defendants are not compliant with Court orders. This becomes clear from documents filed by the regulator with the Court and seen by FX News Group.
Let’s recall that the CFTC complaint names Storm Bryant, Elijah Bryant, CapitalStorm LLC, generationblack LLC , and ncome LLC as defendants.
According to the complaint, from at least March 2018 through the present, Storm Bryant and Elijah Bryant III, individually and through Capital Storm, Generation Black, and Ncome, have fraudulently solicited, and continue to fraudulently solicit, existing and prospective clients who are not eligible contract participants (ECPs) to engage in retail transactions in off-exchange Forex on a leveraged, margined, or financed basis.
The CFTC alleges that the defendants have received at least $1.05 million from not less than ninety-four clients during the Relevant Period, all of which the defendants misappropriated. Not less than $50,870 was sent back to clients as purported forex trading “profits” in the nature of a “Ponzi” scheme.
The complaint further states that Capital Storm, Generation Black, and Ncome, without registering with the Commission as commodity trading advisors (CTAs), and Defendants Storm and Elijah Bryant, without registering as associated persons (APs) of a CTA, respectively, solicited and continue to solicit clients or prospective clients through in-person solicitations as well as social media platforms such as Facebook and Instagram, including a website operated by Storm and Elijah Bryant, www.capitalstorminvestments.com, to induce non-ECP, retail clients to send Defendants funds.
Storm and Elijah Bryant, both individually and as agents of Capital Storm, Generation Black, and/or Ncome, hold themselves out as highly successful Forex traders who generate tremendous returns for their clients. When the Bryants successfully induced non-ECP, retail clients to send them funds, the Bryants misappropriated the funds by receiving them or moving them into accounts held by Storm and/or Elijah Bryant in their own names and using the funds to purchase jewelry, rent homes, travel to Europe, and fund the Bryants’ personal trading accounts.
Now, it turns out that the defendants are failing to comply with Court orders. The CFTC has filed a motion for issuance of an Order to Show Cause as to the defendants should not be held in civil contempt for violation of the Consent Order of Preliminary Injunction.
According to the injunction order, which the Court entered on October 28, 2021, the Defendants agreed to allow immediate inspection of their books, records, and other documents; to provide certain information to Plaintiff within five days, including “an accounting of the disposition of all assets accepted by the Defendants from each participant in the Defendants’ pool, from the date of receipt to the date of this Order,” a list identifying each participant in the pool, including each participant’s name, address, telephone number and email address;” and to provide within five days “immediate access to all records of Defendants held by financial institutions located within or outside the territorial United States by signing the Consent to Release of Financial Records attached to this Order and submitting same to counsel for the Commission.
Despite counsel for the Commission’s repeated attempts to procure the Defendants’ voluntary compliance with the clear and unambiguous terms of the Court’s order, the Defendants have failed to produce any records as ordered, failed to produce computers and cell phones as ordered, failed to produce the participant list as ordered, and failed to produce the accounting as ordered.
That is why, the CFTC seeks that the Court finds the defendants in contempt. The purposes of civil contempt orders are to coerce obedience to a court order and to compensate a party for losses sustained as a result of the contumacy.