USA Forex Fraud Watch: Indiana man settles SEC FX trading fraud charges

The Securities and Exchange Commission (SEC) announced yesterday on August 6, 2014, the Honorable Tanya Walton Pratt of the United States District Court for the Southern District of Indiana, entered final judgments against Ryan W. Koester and his company Rykoworks Capital Group, LLC (Rykoworks), in a fraudulent investment scheme case the SEC filed against Koester, Rykoworks, and others on September 24, 2012.

The SEC’s complaint alleged that Koester held himself out as an expert foreign currency trader, and falsely represented to investors that his unique trading strategy offered investors a principal guaranteed investment opportunity. As alleged in the complaint, Koester and Rudolf D. Pamejier, a career insurance salesman, agreed to a profit sharing arrangement for clients Pameijer brought to Rykoworks. The complaint alleged that, starting in 2010, Pameijer and his daughter, Lindsay R. Sayer, began soliciting clients to invest with Rykoworks through promissory notes which purported to guarantee investor principal while offering risk free returns from forex trading. As alleged in the complaint, Pameijer and Sayer misappropriated the majority of funds they raised from investors for personal use. The complaint further alleged that the remaining investor funds Pameijer and Sayer transferred to Koester and Rykoworks, and additional funds that Koester raised from investors directly, Koester depleted through trading losses and misappropriation of funds for personal use.

To settle the SEC’s charges, Koester and Rykoworks each consented to the entry of a final judgment that: (i) permanently enjoins them from future violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933, and (ii) orders disgorgement of $382,475 and prejudgment interest of $57,645. The disgorgement obligation was offset, and no civil penalty imposed, in light of Koester’s sentence in a related criminal case. In that case, Indiana v. Ryan Koester, Crim. No. 41C01-1205-FB-00028 (Johnson Circuit Court), Koester pled guilty to state criminal charges and, on January 30, 2014, the court sentenced Koester to two years in prison and ordered him to pay restitution of $517,121.

For additional information, see Litigation Release number 22492 (Sept. 24, 2012).

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