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Screenshot of a breaking news alert e-mail from Q2 2017
The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement Complaint against Barry C. Taylor of Franklin, North Carolina, charging him with operating a multi-million dollar fraudulent scheme through his firms, OTC Investments LLC and Forex Currency Trade Advisors LLC (collectively, Defendants). On April 22, 2015, Judge Martin Reidinger of the U.S. District Court for the Western District of North Carolina, Asheville Division entered an emergency restraining Order freezing Defendants’ assets and prohibiting the destruction or concealment of their books and records. None of the Defendants has ever been registered with the CFTC, as is required.
The CFTC Complaint, filed under seal on April 21, 2015, alleges that from at least August 1, 2011 through the present, the Defendants engaged in a fraudulent scheme that solicited more than $2.4 million from approximately 24 members of the public in North Carolina and other states within the United States and in Canada to participate in a commodity pool that traded leveraged or margined retail off-exchange foreign currency (forex) contracts.
The Complaint further alleges that Taylor misappropriated pool participant funds for personal and other business uses, and to conceal his fraudulent scheme and misappropriation. Also, as alleged, Taylor issued or caused to be issued false account statements to one or more pool participants to cover up his fraudulent scheme.
Taylor, among other things, allegedly made material misrepresentations and omissions to commodity pool participants that 1) Defendants were engaged in profitable forex trading and 2) failed to disclose that Defendants traded only a portion of pool participant funds and misappropriated the remainder through a combination of personal expenditures and partial distributions of diminishing commodity pool funds to pool participants to lull and deceive them.
The Complaint also charges that the Defendants used pool participant funds to pay purported trading profits and supposedly returned pool participants’ principal in the manner of a Ponzi scheme.
In its continuing litigation, the CFTC seeks a return of ill-gotten gains, restitution, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws, as charged.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Western District of North Carolina and the Federal Bureau of Investigation.
CFTC Division of Enforcement staff members responsible for this case are JonMarc P. Buffa, Peter M. Haas, Patricia A. Gomersall, Tashieka Taylor, and Paul G. Hayeck.
To view the release from the CFTC, click here.