CFTC secures preliminary injunction in ROFX case
The Commodity Futures Trading Commission (CFTC) has secured a preliminary injunction freezing the assets of Timothy Stubbs, involved in fraudulent FX scheme ROFX.net.
The relevant order, seen by FX News Group, was signed Judge Darrin P. Gayles from the Florida Southern District Court.
The CFTC moved for entry of a preliminary injunction against Defendant Timothy Stubbs for alleged violations of the Commodity Exchange Act and accompanying CFTC Regulations. The Court concluded that the Commission had made a sufficient showing that Stubbs, through a common enterprise with his co-defendants, violated 7 U.S.C. §§ 6b(a)(2)(A), (C), 6d(a)(1), 9(1) and 17 C.F.R. §§ 5.2(b)(1), (3), and 180.1(a) by accepting and misappropriating customer funds that customers intended to be used for trading in retail Forex and by failing to disclose material facts to customers. Accordingly, a preliminary injunction was seen as necessary to preserve the status quo pending the resolution of this litigation.
On August 31, 2022, the Commission filed a three-count Amended Complaint against Notus LLC d/b/a ROFX, Easy Com LLC d/b/a ROFX, Global E-Advantages LLC a/k/a Kickmagic LLC d/b/a ROFX, Grovee LLC d/b/a ROFX, and Shopostar LLC d/b/a ROFX, and Jase Davis, Borys Konovalenko Anna Shymko, Alla Skala, and Stubbs.
Corporate Defendant Grovee accepted over $1.2 million in ROFX funds during the relevant time period. The record reflects that Stubbs controlled Grovee. Stubbs, a certified public accountant, is named as the sole member of Grovee in Grovee’s Operating Agreement.
Stubbs’s participation in the common enterprise does not appear to be limited to Grovee. Stubbs’s Mississippi residence was used as a mailing address for Corporate Defendants Notus and Shopostar as well as Facilitating Defendants Davis, and Konovalenko. In addition, there is evidence in the record suggesting that Stubbs assisted Davis with the opening of two of Easy Com’s bank accounts used to misappropriate customer funds, including preparing Davis for, and transporting him to, in-person bank meetings in Atlanta.
As per the preliminary injunction, Stubbs is immediately restrained and enjoined, except as otherwise ordered by this Court, from directly or indirectly withdrawing, transferring, removing, dissipating, or otherwise disposing of any assets, wherever located, including the defendant’s assets held outside the United States, or as otherwise ordered by the Court.
The defendant is restrained from directly or indirectly destroying, mutilating, erasing, altering, concealing, or disposing of, in any manner, directly or indirectly, any documents that relate to the business practices or business or personal finances of any defendant.
Stubbs is also preliminarily enjoined from violating the Act and Regulations as charged in the Amended Complaint during the pendency of this action.