The Securities and Exchange Commission (SEC) recently filed a complaint that a day trading firm was really run as a Ponzi scheme.
Naris Chamroonrat of Bangkok, Thailand, and Adam L. Plumer of Las Vegas, who ran the firm Nonko Trading with defrauding hundreds of investors of $1.4 million in a bogus day trading scheme.
According to the complaint filed on December 21, 2016, starting in 2013 and continuing until 2015, the two men recruited two-hundred and sixty investors world-wide to day trade in their firm, Nonko Trading; however trades were never made, fraudulent statements were sent out, and the money was pocketed and used for personal expenses and to pay employees.
“Chamroonrat and Plumer lured investors to day-trade through Nonko with promises of generous leverage, low trading commissions, and low minimum deposit requirements.” The SEC complaint stated. “When investors sent funds to Nonko and proceeded to place trade orders, however, the trade orders were never routed to the markets. Instead, Chamroonrat simply stole the investors’ money, using it, among other things, to fund his personal expenses, to pay Plumer and other associates, and to make Ponzi-like payments to those investors who asked to close their Nonko accounts.”
The highly sophisticated and technological scheme included a bogus trading system called Logix Trader (“Logix”) which gave the appearance to traders that orders were being executed when in fact no order was made.
“As the scheme progressed, Defendants moved the investors they were defrauding from the training accounts to Logix Trader (“Logix”), a phony trading platform that Chamroonrat developed with an associate. Chamroonrat and Plumer falsely touted Logix to investors as a superior trading platform. Just like the training accounts, the Logix platform only simulated trades and positions without sending any trade orders to the markets for execution.” The SEC complaint further stated.
The SEC complaints seeks only civil penalties: permanently barring the two from trading activities and paying back all the ill-gotten gains plus interest.