Forex Fraud

Release: 5312-07
For Release: April 2, 2007

Government Charges Texas Man and his Investment Company with Defrauding Customers in Connection with Internet Solicitations

U.S. Commodity Futures Trading Commission Alleges that Foreign Currency Futures Trading Accounts Managed By Defendants Resulted in More Than $1.5 Million in Losses to Retail Customers

Washington, D.C. ― The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a complaint in the Southern District of Texas against Aden Rusfeldt and Rusfeldt Investments LLP, both of Dickinson, Texas.

The CFTC's complaint alleges fraud in connection with foreign currency (forex) futures transactions. In particular, the complaint alleges that, beginning in at least October 2005, Rusfeldt and Rusfeldt Investments LLP fraudulently solicited members of the retail public to engage in speculative forex futures trading through accounts managed by Rusfeldt. The complaint alleges that the defendants used the Internet website, www.easytrading.biz.

Specifically, according to the complaint, Rusfeldt's fraudulent sales pitches included false representations that large profits were likely or virtually guaranteed, that risks were minimal or could be substantially eliminated, and that new customers could expect to benefit from Rusfeldt's profitable past trading performance. In fact, Rusfeldt's customers sustained more than $1.5 million in losses during the relevant period. Additionally, while the Internet website represented that Rusfeldt was compensated only if his trading made profits in client accounts, in reality Rusfeldt and Rusfeldt Investments LLP received commission rebates on all trades made in client accounts regardless of whether those trades were profitable.

While making these false representations, Rusfeldt and Rusfeldt Investments LLP failed to disclose material information, including Rusfeldt's losing trading track record and his collection of commission rebates from the futures commission merchants at which his clients opened trading accounts.

The complaint also alleges that Rusfeldt Investments LLP is liable as principal for the fraud violations of its employee, Rusfeldt, and that Rusfeldt is liable for Rusfeldt Investments LLP's fraud as controlling person of the firm.

Court Prohibits Defendants From Destroying Records

On March 13, 2007, the Honorable Judge Samuel B. Kent of the United States District Court for the Southern District of Texas, Galveston Division, issued a statutory restraining order prohibiting the destruction of defendants' books and records. On March 21, 2007, the Court issued an Order of Preliminary Injunction, which, among other things, prohibits the defendants from engaging in any commodity interest trading. A supplemental hearing is scheduled for April 13, 2007.

In its ongoing litigation, the CFTC is seeking preliminary and permanent injunctive relief, repayment of customer losses, and payment of monetary penalties.

The following Division of Enforcement staff members are responsible for this case: Christine Ryall, Patricia Gomersall, Paul Hayeck and Joan Manley.