The Commodity Futures Trading Commission (CFTC) Whistleblower Office recently posted two new Notices of Covered Actions (NCAs) which both cover forex fraud cases. The NCAs signal that individuals may now submit whistleblower award claims for the cases.
The first NCA covers a case in which the CFTC charged a Danish resident, Casper Mikkelsen, with forex fraud and misappropriation. According to the CFTC, “Mikkelsen falsely promised clients he would use his discretion to trade forex on their behalf.” The CFTC alleges that Mikkelsen received over $1.5 million from investors and, instead of using those funds for forex trading as promised, he misappropriated the funds. “Mikkelsen used the clients’ funds for his own benefit and to pay certain clients purported forex trading profits as is typical in a Ponzi scheme,” the CFTC claims. Mikkelsen is to pay $1,191,286 in restitution and a $3,573,860 penalty.
“The CFTC will continue to partner with foreign regulators and other agencies to aggressively pursue individuals who use our markets to misappropriate funds from unsuspecting victims no matter where these individuals may reside,” said CFTC Acting Director of Enforcement Vincent McGonagle.
The second NCA covers a case in which the CFTC charged Florida-based companies and their owner for a fraudulent forex and digital asset scheme. According to the CFTC, from approximately 2016 through 2018, Alan Friedland and his companies, Fintech Investment Group, Inc. and Compcoin LLC, “fraudulently solicited customers and prospective customers to purchase a digital asset known as Compcoin.”
“The defendants falsely promised, among other things, that Compcoin would allow customers to gain access to what they described as Fintech’s proprietary forex algorithmic trading program known as ART,” the CFTC further claims. The defendants will pay $1,200,000 in restitution and a $600,000 civil monetary penalty.
“This matter demonstrates the CFTC will continue to focus on customer protection and vigorously litigate the cases it files to obtain appropriate relief,” said McGonagle. “As required by the Commodity Exchange Act and CFTC regulations, commodity trading advisors must ensure they are providing accurate and complete information to potential customers so they can make informed decisions before entering into an advisory relationship.”
The NCAs mean that the CFTC is now accepting whistleblower award applications for the cases covered. By posting a NCA, the CFTC has not made any determination that a whistleblower contributed to the success of the case. The agency posts NCAs for any action in which over $1 million in sanctions are collected. Individuals have 90 days from the date the NCA is posted to apply for an award by submitting a Form WB-APP.
Through the CFTC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information which leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government in the action.
Since issuing its first award in 2014, the CFTC has doled out approximately $330 million in whistleblower awards in connection to enforcement actions that have resulted in monetary sanctions totaling more than $3 billion.