US CFTC sues Cash FX Group and its executives, alleging involvement in a $950 million foreign exchange Ponzi scheme.

On September 25, the U.S. Commodity Futures Trading Commission (CFTC) announced it had filed a lawsuit in the U.S. District Court for the Middle District of Florida against Cash FX Group and its CEO Huascar Jose Lopez Castillo, The Conversion Pros and its CEO Ronald Pope, and Justin Halladay. The CFTC alleges the defendants operated a multi-level marketing Ponzi scheme, illegally raising over $950 million from the public including U.S. residents, claiming the funds would be used to trade retail foreign exchange contracts and promising weekly investment returns of up to 15%. According to the CFTC, Cash FX only conducted a small amount of actual forex trading, misappropriating nearly all participants’ funds. It used money from new participants to pay out fraudulent trading profits to other participants, while also paying millions of dollars to the defendants. The company maintained the fraud by providing false account statements. The CFTC states that participants have lost at least $406 million, and it is currently seeking to recover funds, forfeit illegal proceeds, impose civil penalties, secure trading and registration bans, and obtain permanent injunctions barring the defendants from further violating the Commodity Exchange Act and CFTC regulations.