September 10, 2019
CFTC Charges Trading Systems Firm and its Principal with Solicitation Fraud and False Statements
Washington, DC –The U.S. Commodity Futures Trading Commission today filed a civil lawsuit in the U.S. District Court for the Southern District of New York against Canadian resident Simon Jousef and his business FuturesFX. The defendants are charged with fraudulently soliciting people, in the U.S. and abroad, to subscribe to a trading system that included a supposedly “live” foreign exchange (forex) and commodity futures online trading room, educational videos, and online support (trading system). In addition, the CFTC’s complaint charges Jousef with making false or misleading statements to the National Futures Association (NFA).
Specifically, the CFTC complaint alleges that from at least July 1, 2014 to on or about January 31, 2016, Jousef and FuturesFX fraudulently promoted and sold access to the trading system ostensibly to provide, among other things, a methodology for determining when to enter and exit forex and commodity futures contracts. According to the complaint, to induce members and prospective members to purchase subscriptions to the trading system, the defendants made numerous materially false or misleading statements and omissions on the company’s websites at futuresfx.ca and globaltraderoom.com, in the online trade room, and in email advertisements, including:
- Falsely or misleadingly claiming that Jousef was trading forex and commodity futures in a “live trading room,” when in fact Jousef never actually traded and only made hypothetical or simulated trades;
- Falsely claiming that Jousef’s “live” trades were profitable when in fact Jousef never executed any live trades in the “live trading room,” much less profitable ones;
- Making false and misleading statements concerning Jousef’s background and trading experience, including that Jousef was registered with the CFTC as a commodity trading advisor (CTA) when, in fact, he was not;
- Misrepresenting the risks associated with trading forex and futures contracts, such as advertising “Free Money” and “A Guaranteed Winning Formula;”
- Failing to provide proper disclosures concerning client testimonials and hypothetical or simulated trading results.
The defendants allegedly charged members up to approximately $9,000 to receive this access to the trading system. The CFTC’s complaint alleges that, as a result of the fraudulent solicitation scheme, the defendants received approximately $1.3 million in subscription fees from more than 300 members located in the United States and other countries.
In addition, the complaint alleges that Jousef knowingly made false or misleading statements regarding material facts to the NFA when he submitted annual CTA registration updates concerning FuturesFX’s predecessor company.
In its continuing litigation, the CFTC seeks a return of ill-gotten gains, restitution to defrauded customers, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws.
The CFTC appreciates the cooperation and assistance of the NFA and Ontario Securities Commission in this matter.
CFTC Division of Enforcement staff members responsible for this case are Steve Kim, Kara Mucha, Kathleen Banar, and Rick Glaser.
CFTC’s Fraud Advisories: Commodity Trading Systems Sold on the Internet
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Trading Systems Sold on the Internet Advisory, which states that the CFTC has seen an increase in websites fraudulently promoting commodity trading systems and advisory services.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.