CFTC goes after $59M fraudulent scheme EminiFX
The Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the New York Southern District Court against Eddy Alexandre of Valley Stream, New York, and his company, EminiFX, Inc. The CFTC charges the defendants with fraudulent solicitation and misappropriation in connection with soliciting clients to trade Forex, commodity futures contracts, and cryptocurrencies.
The complaint alleges that since at least September 2021 to the present, the defendants solicited and accepted at least $59 million from hundreds of people to purportedly trade Forex and cryptocurrencies, as well as futures and options, in an investment club. The defendants guaranteed customers returns of 5% per week.
In fact, the defendants’ used only approximately $9 million of customers’ funds to trade forex and cryptocurrency in an account in Alexandre’s name. Alexandre lost nearly 70% of that amount —approximately $6.2 million—through unprofitable trading and fees.
The complaint alleges the defendants also misappropriated substantial amounts of the remaining customer money by sending it to accounts in Alexandre’s name, using it to pay other customers in a Ponzi-like scheme, and using it for Alexandre’s personal expenses.
For example, Alexandre used participant funds to make payments to BMW, Mercedes Benz, and Saks Fifth Avenue. Payments were also made for flights, luxury hotels, clothing, and occupational and physical therapy. Alexandre also used substantial participant funds to rent and furnish office space for EminiFX and to host “galas” on behalf of EminiFX, which the defendants used to solicit additional contributions from participants.
In its continuing litigation, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA).