Home Forex CFTC Secures $102 Million Penalties in Highrise Advantage Forex Scandal

CFTC Secures $102 Million Penalties in Highrise Advantage Forex Scandal

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The
Commodity Futures Trading Commission (CFTC) announced that Judge Carlos E.
Mendoza of the U.S. District Court for the Middle District of Florida has
issued a default judgment against Avinash Singh and his company, Highrise
Advantage, LLC. The judgment grants a permanent injunction and imposes monetary
sanctions in connection with a multi-level, multi-million dollar off-exchange
foreign currency (forex) scheme.

The
civil enforcement action, initiated by the CFTC on September 9, 2020, targeted
Singh, Highrise, and eight other defendants. The court’s order has now concluded the
case, finding that Singh engaged in fraudulent solicitation and the misappropriation of funds
through the master commodity pool, Highrise, as well as four feeder commodity pools. On top of that, Singh
and the Highrise firm failed to register with the CFTC as required, thereby violating
regulatory requirements pertaining to the operation of commodity pools.

The
default judgment and permanent injunction prohibit Singh as well as Highrise from
engaging in conduct that violates the Commodity Exchange Act and CFTC
regulations. Furthermore, they are both ordered to pay a total of $25,558,594 in restitution
and $76,675,782 in civil monetary penalties. Additionally, the court has permanently banned
Singh and Highrise from registering with the CFTC and participating in trading
on any registered entity.

The
court’s order revealed that Singh and Highrise collected nearly $58 million from
investors and feeder funds. However, less than $2.5 million was used for actual
forex trading, with over $25 million misappropriated. Investor funds were
utilized for Ponzi-type payments and personal expenses, while false statements
showing profits and no losses were sent to investors and feeder funds.

Notably,
on July 5, 2023, the court entered consent orders against the operators of the
four feeder commodity pools: SR&B Investment Enterprises, Inc., Green Knight
Investments, LLC, Bull Run Advantage, LLC, and King Royalty, LLC. These consent
orders resolve the litigation fully.

Ponzi Scheme Fallout: Galles Entities Slapped with $20
Million Fine

Finance Magnates
previously reported that a
federal court has ruled in the case of Phillip Galles and his associated entities, including Tyche
Asset Management LLC
, to pay over $20 million. This ruling is in response to their involvement in orchestrating a Ponzi
scheme within the commodity pool sector. The court’s decision, as detailed by
Finance Magnates, found Galles liable for defrauding investors, misappropriating funds
for personal use, and making false claims of extraordinary returns.

The CFTC also found Galles liable for defrauding investors,
diverting funds for personal use, and making false claims of extraordinary
returns. The court’s decision imposes a substantial financial penalty and
enforces a permanent trading ban on regulated markets to prevent future
violations. The CFTC
issued a cautionary note that repayment orders may not guarantee the recovery
of lost funds.

The
Commodity Futures Trading Commission (CFTC) announced that Judge Carlos E.
Mendoza of the U.S. District Court for the Middle District of Florida has
issued a default judgment against Avinash Singh and his company, Highrise
Advantage, LLC. The judgment grants a permanent injunction and imposes monetary
sanctions in connection with a multi-level, multi-million dollar off-exchange
foreign currency (forex) scheme.

The
civil enforcement action, initiated by the CFTC on September 9, 2020, targeted
Singh, Highrise, and eight other defendants. The court’s order has now concluded the
case, finding that Singh engaged in fraudulent solicitation and the misappropriation of funds
through the master commodity pool, Highrise, as well as four feeder commodity pools. On top of that, Singh
and the Highrise firm failed to register with the CFTC as required, thereby violating
regulatory requirements pertaining to the operation of commodity pools.

The
default judgment and permanent injunction prohibit Singh as well as Highrise from
engaging in conduct that violates the Commodity Exchange Act and CFTC
regulations. Furthermore, they are both ordered to pay a total of $25,558,594 in restitution
and $76,675,782 in civil monetary penalties. Additionally, the court has permanently banned
Singh and Highrise from registering with the CFTC and participating in trading
on any registered entity.

The
court’s order revealed that Singh and Highrise collected nearly $58 million from
investors and feeder funds. However, less than $2.5 million was used for actual
forex trading, with over $25 million misappropriated. Investor funds were
utilized for Ponzi-type payments and personal expenses, while false statements
showing profits and no losses were sent to investors and feeder funds.

Notably,
on July 5, 2023, the court entered consent orders against the operators of the
four feeder commodity pools: SR&B Investment Enterprises, Inc., Green Knight
Investments, LLC, Bull Run Advantage, LLC, and King Royalty, LLC. These consent
orders resolve the litigation fully.

Ponzi Scheme Fallout: Galles Entities Slapped with $20
Million Fine

Finance Magnates
previously reported that a
federal court has ruled in the case of Phillip Galles and his associated entities, including Tyche
Asset Management LLC
, to pay over $20 million. This ruling is in response to their involvement in orchestrating a Ponzi
scheme within the commodity pool sector. The court’s decision, as detailed by
Finance Magnates, found Galles liable for defrauding investors, misappropriating funds
for personal use, and making false claims of extraordinary returns.

The CFTC also found Galles liable for defrauding investors,
diverting funds for personal use, and making false claims of extraordinary
returns. The court’s decision imposes a substantial financial penalty and
enforces a permanent trading ban on regulated markets to prevent future
violations. The CFTC
issued a cautionary note that repayment orders may not guarantee the recovery
of lost funds.

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