SEC goes after Avail Progression, Elite Generators for $4M Forex offering fraud
The Securities and Exchange Commission (SEC) has announced charges against John Fernandez and two companies he controls, Avail Progression, LLC and Elite Generators, Inc., for conducting a fraudulent scheme involving two unregistered forex investment offerings that collectively raised over $4.3 million from more than 100 investors.
The SEC alleges that Houston resident John Fernandez, a 26-year old high school graduate with no professional trading experience, told investors he was a trading savant with a proven track record who could guarantee returns up to 100% based on his trading strategies in the Forex markets. According to the SEC, Fernandez started the fraudulent scheme at Avail Progression, and then transitioned to Elite Generators once he ran out of investor funds.
The complaint alleges that Fernandez promised investors he would trade their money in the forex markets for guaranteed returns. Fernandez provided investors with basic offering documents memorializing the amount of returns, and the dates investors would receive their returns. However, the complaint alleges that instead of trading their money as promised, Fernandez spent nearly all of the investor funds to make Ponzi payments and fund his personal lifestyle.
According to the SEC, when investors sought overdue returns, Fernandez offered a litany of excuses, including “car troubles,” a failed wedding engagement, and a temporarily frozen trading account.
The Commission’s complaint, filed in U.S. District Court for the Southern District of Texas, charges Fernandez, Avail Progression, and Elite Generators with violating the antifraud and securities registration provisions of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(b) thereunder.
The SEC seeks permanent injunctions, civil penalties, and disgorgement of ill-gotten gains with prejudgment interest against each defendant, as well as a bar against Fernandez from serving as an officer or director of any public company.