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CFTC charges Florida resident with Forex fraud and misappropriation

The US Commodity Futures Trading Commission has announced that Judge James D Whittemore of the US District Court for the Middle District of Florida has entered an emergency order freezing the assets of defendant William Jeffery Chandler of Ft Myers, Florida.

The court’s order also prohibits Chandler from destroying or altering books and records. The judge set a hearing on the CFTC’s motion for a preliminary injunction for 26 September 2012.

The court’s order arises out of a civil enforcement action filed by the CFTC on 10 September 2012, charging Chandler with foreign currency (forex) fraud and misappropriation. Chandler has never been registered with the CFTC in any capacity, according to the complaint.

The CFTC complaint alleges that, since at least July 2010, and continuing to the present, Chandler has solicited at least six individuals to contribute at least USD773,100 to a pooled account to trade off-exchange forex contracts in Chandler’s account at Dukascopy Bank SA, a Switzerland-domiciled bank. To entice prospective pool participants to invest, Chandler allegedly guaranteed a two per cent to 12.5 per cent monthly return on participants’ principal.

However, according to the complaint, Chandler’s Dukascopy Bank account was closed on or about 15 July 2011, due to changes in US regulations. The Dukascopy Bank account was transferred to Alpari US LLC, a US-based registered retail foreign exchange dealer, on 8 August 2011, according to the complaint. At that time, the pooled account allegedly had a balance of only USD292.49, far less than the amount contributed by pool participants.

Chandler allegedly continues to solicit and receive funds from pool participants to trade in his Dukascopy Bank account, even after it had closed, and continues to represent to pool participants that their funds remain in the pool in his Dukascopy Bank account. Although Chandler has received requests from many pool participants to return their funds, he refuses to refund participant’s principal, instead asserting a litany of fabricated excuses, according to the complaint. Chandler has misappropriated the vast majority of the pool’s funds for his personal use, the complaint charges.

Furthermore, pool participants received statements from a purported accounting firm named AR Watkins; however, upon information and belief, AR Watkins is a fictitious entity controlled by Chandler, according to the complaint.

In its continuing litigation, the CFTC seeks civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registration bans, and preliminary and permanent injunctions against further violations of the Commodity Exchange Act and CFTC regulations, as charged.

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