CFTC secures $24M Court order against Kay Yang, AK Equity, Xapphire
The Commodity Futures Trading Commission (CFTC) has secured an order of default judgment and permanent injunction against Kay Yang of Mequon, Wisconsin and her companies, AK Equity Group LLC and Xapphire LLC.
The order was entered earlier in June by the U.S. District Court for the Eastern District of Wisconsin.
The order requires Yang, AK Equity, and Xapphire to pay $13,692,690.27 in restitution to defrauded victims and a $10,387,635.91 civil monetary penalty. Additionally, the order requires Yang’s husband, relief defendant Chao Yang, of Mequon, Wisconsin, to pay $1,422,430.42 in disgorgement.
Additionally, the order states, Yang, AK Equity, and Xapphire are permanently enjoined from engaging in conduct that violates the Commodity Exchange Act (CEA), as charged, registering with the CFTC, and trading in any CFTC-regulated markets.
The order finds Yang and her companies are liable for fraud in connection with retail forex transactions, fraud by a commodity pool operator (CPO) and an associated person of a CPO, and registration violations. The order further finds relief defendant Chao Yang received $1.4 million, which was derived from the fraud.
The order stems from a CFTC complaint filed on April 13, 2022. The order finds that from approximately April 2017 through March 2020, Yang, individually and as the founder and chief executive officer of AK Equity and Xapphire, engaged in a fraudulent scheme through which she solicited and received at least $15.7 million from approximately 67 individuals or entities for participation in a commodity pool that purported to trade Forex.
Most pool participants were members of the Hmong community in Wisconsin. In soliciting funds, the defendants made several false representations and material omissions. The defendants also misappropriated at least $4.8 million of pool participants’ funds and spent that money on Yang’s personal expenses, including spending nearly $1.4 million at casinos and on luxury hotels and cars.
The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets.