A court order has frozen assets held by Minnesota residents Trevor G. Cook and Patrick Kiley, and their companies Oxford Global Advisors, Oxford Global Partners, Universal Brokerage FX and Universal Brokerage FX Diversified, all charged with fraud and misappropriation in connection with off-exchange leveraged foreign currency trading.
The court’s order, entered by Chief Judge Michael Davis of the US District Court for the District of Minnesota, also prohibits the destruction of books and records and provides the Commodity Futures Trading Commission access to such documents.
The court’s order stems from a CFTC complaint filed under seal on 23 November 2009 in the US District Court for the District of Minnesota, charging the defendants with running a massive forex scheme since 2006 that defrauded hundreds of US customers of more than USD190m.
The complaint also charges that the defendants misappropriated customer funds to purchase property, develop a hotel and casino in Panama, buy seven luxury cars, a house boat and a submarine and fund their frequent gambling.
The defendants allegedly solicited customers to trade forex by fraudulently claiming that, since 2003, they earned more than ten per cent annual profits and sustained no losses. The defendants also claimed that customers’ funds were placed in managed, segregated accounts with Crown Forex, a Swiss company majority-owned by Cook since December, 2008.
Instead, defendants misappropriated customer funds and continued to solicit and accept funds until July 2009 – even though the Swiss Financial Market Supervisory Authority placed Crown Forex into receivership in December 2009 and into bankruptcy in May 2009.
The defendants perpetuated their fraud by providing customers with account statements falsely depicting that their accounts were earning from ten to 12 per cent annual profits.
In its continuing litigation, the CFTC seeks a return of ill-gotten gains, restitution to defrauded customers and civil monetary penalties.
