The US Commodity Futures Trading Commission has obtained an order against defendants One World Capital Group of Winnetka, Illinois and John Edward Walsh of Lake Forest, Illinois, requiring each to pay a USD260,000 civil monetary penalty for failing to demonstrate compliance with CFTC net capital requirements.
The Honourable Joan H. Lefkow of the US District Court for the Northern District of Illinois entered the consent order of permanent injunction on 25 February 2010.
The order resolves a complaint brought by the CFTC on 13 December 2007 which charged One World, a registered futures commission merchant and forex dealer member, and its president Walsh, with inability to demonstrate compliance with capitalisation requirements and with failure to maintain required books and records as required by federal commodity laws.
According to the order, Walsh admitted that he could not make the required net capital calculation because he was unable to determine One World’s current liabilities to forex customers or One World’s ability to pay its customer liabilities.
The known financial accounts held in the name of One World on 13 December 2007 contained a total of only USD639,815, which was at least USD9m short of the claimed liabilities to customers who maintained accounts with One World for the purpose of trading foreign currency contracts.
The order also states that One World and Walsh failed to maintain books and records as required by CFTC regulations.
In a separate action on 4 March 2010, based on the facts of the federal district court case, the CFTC simultaneously filed and settled a statutory disqualification action against One World Capital Group, revoking its registrations as a futures commission merchant and commodity trading adviser.
In January 2009, Walsh was arrested on federal fraud charges in connection with the operation of One World Capital Group. In February 2009, criminal authorities seized assets of Walsh and One World, including the funds frozen by the court in the CFTC action.
