June 22, 2017

CFTC Charges New Jersey Resident Michael S. Wright and New York Firm Wright Time Capital Group LLC (d/b/a Global FX Club) with Solicitation Fraud and Misappropriation in Connection with a Pooled Investment in Foreign Currency Derivatives Trading

CFTC Complaint also Charges them with Issuing False Account Statements and Registration Violations

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today filed a civil enforcement action in the U.S. District Court for the Southern District of New York against Defendants Michael S. Wright, of Jersey City, New Jersey, and his firm Wright Time Capital Group LLC, d/b/a Global FX Club (WTCG), a New York limited liability company, charging them with fraud, misappropriation, and issuing false account statements in connection with a pooled investment in foreign currency derivatives (forex) trading. The CFTC Complaint also charges WTCG with failing to register with the CFTC as a commodity pool operator (CPO), as required, and engaging in activities prohibited for a CPO, including commingling pool funds with Defendants’ funds.

Specifically, the CFTC Complaint alleges that from approximately August 2010 through the present, Defendants engaged in a fraudulent scheme to solicit more than $400,000 from at least 10 members of the public, promising to use pool participant funds for forex trading. Defendants allegedly traded only a portion of pool participants’ funds and misappropriated the majority of those funds for unauthorized personal or business expenses such as food, clothing, jewelry, and entertainment.

The CFTC Complaint further alleges that to conceal Defendants’ trading losses and misappropriation, Defendants made and issued false account statements to pool participants, including statements that created the appearance of positive pool trading gains during periods of time when Defendants did not actually engage in forex trading, or engaged in trading that was unprofitable. The CFTC Complaint also alleges that Defendants, including Wright as controlling person of WTCG, failed to operate the commodity pool as a separate legal entity, received funds in WTCG or Wright’s name rather than the name of the commodity pool, commingled pool funds with non-pool property, and failed to register WTCG as a CPO despite operating it as one.

In its continuing litigation, the CFTC seeks, among other relief, restitution to defrauded pool participants, disgorgement of benefits from violations of the Commodity Exchange Act and CFTC Regulations, civil monetary penalties, trading and registration bans, and a permanent injunction against future violations of federal commodities laws, as charged.

The CFTC thanks the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation, New York Field Office, for their assistance.

CFTC Division of Enforcement staff members responsible for this case are Alejandra de Urioste, Trevor Kokal, K. Brent Tomer, Lenel Hickson, Jr., and Manal M. Sultan.

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CFTC’s Fraud Advisories

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud. These include, the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools, and the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud.

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. 

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Dennis Holden
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Last Updated: June 22, 2017