About a month after the United States Commodity Futures Trading Commission (CFTC) launched an enforcement action against Troy Mason and ZTegrity, Inc, the regulator has managed to secure an order of preliminary injunction against the Forex fraudsters.
According to the order, signed by Judge George C Hanks, Jr of the Texas Southern District Court, there is good cause to believe that Mason, individually and as an agent, officer, principal, and control person of ZTegrity, and/or other agents, officers, and/or principals of ZTegrity have engaged, are engaging, and are reasonably likely to continue engaging in fraud in connection with retail forex transactions, and are reasonably likely to continue acting as unregistered retail forex commodity pool operators in violation of the laws.
There is also good cause to believe that immediate and irreparable damage to the Court’s ability to grant effective final relief for participants in the form of monetary or other redress will occur from the withdrawal, transfer, removal, dissipation or other disposition of funds, assets, or other property.
Therefore, the Court ruled that there is good cause for the Court to issue a preliminary injunction prohibiting the Defendants from withdrawing, transferring, removing, dissipating, or otherwise disposing of any assets owned, controlled, managed or held by the Defendants, or in which they have any beneficial interest.
There is also good cause for the Court to prohibit the Defendants from destroying, altering or disposing of any records, and from denying representatives of the Commission access to inspect records, when and as requested, to ensure that Commission representatives have immediate and complete access to those records.
According to the CFTC complaint, from at least October 2019 to the present the defendants used various websites and social-media platforms to fraudulently market their Forex trading pool as a version of a savings account that offered a greater yield with similarly low or no risk. The defendants called the pool “The Black Club” and “The Forex Savings Club,” which their website claimed had received over $460,000 from 411 participants.
The complaint further alleges the defendants induced participation in their Forex trading pool by falsely claiming to “guarantee” to repay participants the funds they contributed to their individual “Forex Savings Accounts” and falsely offered participants “with a 100% certainty” portions of the “substantial profit[s]” to be generated using participants’ pooled funds to trade forex.
Rather, as alleged in the complaint, the defendants knew or recklessly failed to appreciate that no forex trader can guarantee profitable trading, or the avoidance of losses required to guarantee all participants’ contributions, and knew, but failed to inform participants that they had no U.S.-based forex trading accounts.
In its continuing litigation, the CFTC seeks full restitution to defrauded clients, disgorgement of any ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the CEA, as charged.