The U.S. derivatives regulator alleged in its complaint that from October 2019 to June 2021, Mason engaged in a fraudulent scheme that netted nearly $460,000 from at least 411 retail investors.
As such, the order requires Mason and his company Ztegrity to pay in restitution to customers and $300,000 in civil monetary penalties, respectively.
On top of the fiscal penalty, the order also permanently prohibits the defendants from further violations of the CEA and CFTC regulations, as charged, and imposes permanent registration and trading bans.
The defendants called this forex trading pool “The Black Club” and “The Forex Savings Club. In connection with the promotion of his pool, Mason made a series of materially false claims to lure investors interested in Forex trading.
The claim was made that pool participants could get extraordinary investment returns. While he actually had no experience in running trading strategies.
Mason claimed that he had profitably traded forex on behalf of himself and others.
In addition, Mason did not disclose to clients that under his so-called “profit” sharing agreement he will charge some fees, even if losses accumulated in their accounts.
In a parallel criminal action, in some cases instead of using the investors’ monies in trading, the fraudster misappropriated the majority of the pool funds, which was largely spent on personal expenses.
“The order further finds the defendants induced participation in their forex trading pool by falsely claiming to “guarantee” to repay participants the funds they contributed to their individual “Forex Savings Accounts” and falsely offered participants “with a 100% certainty” portions of the “substantial profit[s]” to be generated using participants’ pooled funds to trade forex.
In truth, the defendants knew or recklessly failed to appreciate that no forex trader can guarantee profitable trading, or the avoidance of losses required to guarantee all participants’ contributions, and knew, but failed to inform participants, they had no U.S.-based forex trading accounts,” the statement further reads.
Finally, the CFTC warned victims that although it works closely with authorities to seek prompt return of all misappropriated funds, wherever situated, they may not recover their lost money because the wrongdoers may not have sufficient funds or assets.