More than two years after the launch of its action against $75 million Ponzi scheme Oasis International, the United States Commodity Futures Trading Commission (CFTC) is trying to make progress in the lawsuit by seeking to subpoena a UK Forex firm allegedly linked to the scam.
On April 28, 2021, the CFTC filed a motion with the Florida Middle District Court, asking to subpoena ATC UK.
Let’s recall that, on April 15, 2019, the CFTC filed an emergency ex parte action to halt a $75 million Ponzi scheme that allegedly violated anti-fraud and registration provisions of the Commodity Exchange Act, 7 U.S.C. § 1 et seq. (2018), and the Commission’s Regulations. That same day, the Court entered a statutory restraining order, which among other things, prohibited the withdrawal, transfer, removal, dissipation, and disposal of assets by the defendants, and appointed a receiver, Burton W. Wiand.
The Oasis Ponzi scheme involved solicitation and misappropriation of money from over 700 U.S. residents for pooled investments in retail FX contracts. As alleged, pool funds were transferred to a forex trading account in the United Kingdom.
On March 31, 2021, the Receiver filed a motion to approve his engagement of contingency counsel for the purpose of further investigating and pursuing claims against ATC Brokers, Ltd. (“ATC UK”) and related individuals and entities.
ATC UK is a United Kingdom “brokerage firm that serves the forex industry from its headquarters in London and operations in the U.S.” In his ATC Motion, the Receiver alleges, among other things, facts that indicate ATC UK may have been complicit in the fraud perpetrated by Oasis and its principals. On April 20, the Court granted the Receiver’s ATC Motion.
ATC UK is affiliated with ATC Brokers (“ATC US”), based in Glendale, California. ATC US is registered as an introducing broker with the CFTC and listed as a forex firm and member with the National Futures Association (NFA), a self-regulatory organization designated by the CFTC as a registered futures association.
David Manoukian is the Chief Executive Officer of ATC US and is registered as an associated person of ATC US with the CFTC and listed as a principal and forex associated person of ATC US with NFA. As CFTC registrants, the CFTC has regulatory responsibilities associated with ATC US and Manoukian—neither of whom are currently defendants in this action.
Now, the CFTC seeks to conduct third-party discovery related to the issues raised by the Receiver’s ATC Motion.
The CFTC moves this Court for an order granting limited relief from the stay of this litigation such that the CFTC may issue Federal Rule of Civil Procedure 45 subpoenas to the ATC Entities, as well as to any other non-party entities and individuals the CFTC believes likely to possess relevant information related to claims and possible defenses involving the ATC Entities.