CFTC seeks imposition of fines on all defendants in CapitalStorm case
The Commodity Futures Trading Commission (CFTC) is asking the Court to fine all of the defendants in the lawsuit targeting fraudulent Forex scheme CapitalStorm. The regulator claims that the additional fines should be imposed because the defendants violate Court orders.
Let’s recall that in September 2021, the CFTC filed a complaint with the North Carolina Western District Court. The document 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.
According to the latest Court filings, the CFTC requests the Court enter an order finding each of the defendants in contempt, and ordering each of the defendants to immediately appear at the federal courthouse in Charlotte, North Carolina to surrender all computers, laptops, cell phones, tablets, ESI, business records, communications, trading records, financial records, bank records, crypto currency records, E-Wallets addresses and passwords, and all other records covered by the Consent PI Order at that time.
Further, the Commission requests the Court order each of the defendants to present themselves in Charlotte, North Carolina for eight hours of deposition testimony each, so that the Commission may discover the actual disposition of client funds, the operation of the Defendant’s fraudulent scheme, and all other relevant facts associated with this matter.
Further, the CFTC requests the Court impose a fine of $1,000 per day against each Defendant for their contempt of this Court’s authority, beginning on October 25, 2021 and continuing until the Defendants purge their respective contempt; alternatively, the Commission requests this Court fine the Defendants as noted above, and also issue a bench warrant for the arrest of Storm and Elijah Bryant, to be held in federal custody until such time as they fully and completely purge their contempt by fully complying with the Consent PI Order.
A review of the business records attached to the motion reveals why the defendants have failed to comply with the terms of the Consent PI Order. Rather than produce entire bank and/or financial statements, together with account opening documents, signature cards, wires, debits, credits, trade statements, correspondence, texts, emails, and the like, the defendants produce selected screenshots of selected pages of selected statements.
The Defendants have shipped a single cell phone and a single tablet to the Commission as part of their self-describe “staggered” production. Nowhere in the Court’s order is there any mention of “staggered” compliance. Indeed, “staggered” compliance is merely another way to describe willful contempt, the CFTC says.
The regulator concludes that the defendants’ contempt and incessant attempts to pervert the clear and unambiguous terms of the court’s order to their own time-table and convenience is apparent on its face. Such conduct is in contempt of the Court’s authority and should be treated as such, the CFTC says.