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CFTC charges Florida resident and his Panamanian corporation with fraud and misappropriation

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The US Commodity Futures Trading Commission (CFTC) has filed an enforcement action against Trader’s International Return Network (TIRN), a Panamanian corporation, and its president David Merrick of Apopka, Florida, charging them with solicitation fraud and misappropriation of customer funds involving at least USD16.4 million.

According to the CFTC complaint, filed on October 14, 2009, in the US District Court for the Middle District of Florida, TIRN represented itself as a “private investment club” that provided various investment services, including foreign currency (forex) investing, through its purported Real Century forex trading program. As alleged, the defendants accepted at least USD16.4 million from customers to participate in TIRN’s investment program; however, no customer funds were invested as described on the TIRN website and in TIRN’s written materials. The CFTC complaint charges the defendants with misappropriating customer funds for various other purposes, including diverting more than USD2 million for Merrick’s personal use.

The CFTC complaint seeks a court order that freezes the defendants’ assets, provides the CFTC with continuing access to books and records and requires an accounting of funds. The CFTC also seeks orders of preliminary and permanent injunction that would require the defendants to disgorge ill-gotten gains, pay restitution to defrauded investors and impose civil monetary penalties.

The US Securities and Exchange Commission simultaneously filed a civil securities enforcement action against TIRN and Merrick in the same district court. The US Attorney’s Office made a parallel criminal investigation public on October 7, 2009, when it executed numerous simultaneous search and forfeiture seizure warrants.

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