The US Commodity Futures Trading Commission has charged Patrick Rakotonanahary and Cyber Market Group, both of Punta Gorda, Florida, with operating a multi-million dollar foreign currency Ponzi scheme in Hawaii and elsewhere in the US.
The CFTC’s lawsuit, filed on 15 March 2010 in the US District Court for the District of Hawaii, charges that, since at least June 2008, Rakotonanahary, the president and chief executive officer of Cyber Market, and Cyber Market induced customers to purportedly loan them money to trade forex on their behalf.
The CFTC complaint alleges that the defendants promised customers weekly payments of four per cent to ten per cent from the forex trading, knowing that they lacked the funds to make such payments.
The complaint further alleges that the defendants falsely represented to customers that the payments were derived from profitable forex trading. In reality, however, these payments were made from customers’ own funds and/or the funds deposited by other clients.
According to the complaint, the defendants also misappropriated client funds for their own personal use. In addition, Rakotonanahary and Cyber Market allegedly misrepresented that they had not lost funds in seven years of trading forex and provided false statements to investors, showing a balance of more than USD8m in Cyber Market’s forex trading account when, in fact, the account contained less than one per cent of that amount.
In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of the federal commodities laws.
