The Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Central District of California, Western Division, entered an order which granted the CFTC’s motion for default judgment (Order) and a judgment consistent with the Order (Judgment) against defendants Jin Choi (Choi), a citizen of the Republic of South Korea with a last known residence in Los Angeles, California, as well as his companies Apuro Holdings Ltd (Apuro) d/b/a, ApuroFX, JCI Holdings USA (JCI), and d/b/a JCI Trading Group, LLC (collectively the defendants), in connection with a fraudulent foreign currency (forex) scheme that victimized customers in the United States, Australia, Indonesia, and elsewhere.
The Judgment, entered on March 5, 2019 by the Honorable Dolly M. Gee, requires the defendants, jointly and severally, to pay restitution of $1,121,672 to defrauded customers and a civil monetary penalty of $1,121,672. The Judgment also imposes permanent trading and registration bans against Defendants and prohibits them from violating provisions of the Commodity Exchange Act and CFTC regulations, as charged in the Complaint filed on May 14, 2018. (see CFTC Complaint and Press Release 7733-18).
The Order finds that, from January 2014 to the present, the defendants fraudulently solicited and accepted at least $1,145,672 from fourteen individuals (customers) for the purported purpose of trading off-exchange margined or leveraged retail forex contracts on their behalf. According to the Order, the defendants never used customer funds for trading as they represented. Instead, the Order finds that the defendants misappropriated all of the customer funds to support Choi’s lavish lifestyle and to return approximately $24,000 to certain customers as purported “profits” in the manner of a “Ponzi” scheme, all while falsely representing that they were profitably trading on customers’ behalf.
The Order also finds that as part of their solicitations, the defendants made material misrepresentations, including that annual returns of 20%-50% would be paid out to customers on a quarterly basis and that Apuro was registered with the CFTC as a futures commission merchant, among other material misrepresentations and omissions. In fact, the Order further finds, Apuro and JCI were acting as unregistered commodity trading advisors (CTAs) and that Choi was acting as an unregistered associated person of the CTAs.
The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this case are Danielle Karst, Timothy J. Mulreany, George H. Malas, Anthony Homer, and Paul G. Hayeck.
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CFTC’s Foreign Currency (Forex) Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
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Dovish cues from 
On The Lookout: As trading session comes to close for the week, investors main focus shifts towards US macro data which is expected to provide directional cues. Multiple central bank interest rate decision and comments from central bank members kept overshadowing macro data outcome resulting in headlines pertaining to geo-political events and comments from central bank figureheads controlling price action so far. But all such events are over for the week and now investors are eyeing US macro data as the outcome of today’s US NFP data will decide USD ‘s strength and directional bias in broad market. The directional bias of US dollar as market closes tonight will decide the short term price momentum and act as fundamental indicator of price action for the week ahead. Aside from non-farm payroll data US economic calendar is scheduled to see release of building permits, unemployment rate and average hourly earnings data while Canadian calendar will see the release of Employment change and unemployment rate data.
Given recent mixed price activity in equity market, investor sentiment had taken a dovish tone and caution ahead of today’s ECB interest rate update led to further risk averse trading activity resulting in forex and equities being painted in red.
Trading Perspective: As investors await US non-farm payroll and employment data scheduled to release tomorrow, and market is currently seeing high level of risk averse trading activity, macro data updates from American market hours are expected to provide short term profit opportunity but keep price action mostly range bound.
Gains were capped in the broad market despite increased risk appetite as investors are cautious ahead of next week’s major political events but bulls pushed for sharp upside move supported by weak USD owing to partial US government shutdown.
On The Lookout: Given increased risk appetite in the broad market, major equities and forex pairs are expected to continue positive price action. Investor focus is immediate future is on US core durable goods orders data and new home sales data for short term profit opportunities. However major focus in on next week’s UK Parliament vote on PM May’s Plan B for Brexit and Sino-U.S. trade talks with Chinese Vice Premier Lie He. Given that approval of PM May’s Plan B will lead to soft deal Brexit and she now has backing of DUP party members, Brexit headlines are expected to keep Sterling positive, however Key issues are expected to be addressed for the first time since US & Chinese Presidents agreed to 90-day truce and the outcome will have great influence on price action in major assets resulting in fund flow being limited for short period in major forex and equity markets. Next week’s action is likely to see thin trading volume and high volatility post today’s relatively steady risk appetite influenced price action.
Brexit vote turn out, no confidence vote on PM May and dovish comments from 
On The Lookout: Moving forward this week, now that much awaited brexit vote in parliament is over, investors are expected to focus on macro data filled week for short term profit opportunities. However there is UK parliament’s vote of no-confidence on PM May scheduled to occur later today called for by opposing party leader Jeremy Cobryn who is irked with intentional sabotage tactics handled by PM May on Brexit proceedings. However PM May is expected to win the vote as law makers wish for speedy conclusion of events and Jeremy Cobryn lacks enough votes to oust PM May. In immediate future, investors focus is on US import/export price index data, crude oil inventory data and Chinese Q4 GDP data for short term profit opportunity.
