A US district court in New York sentenced a company and two persons to pay $11.6 million in sanctions for a forex fraud, said the US Commodity and Futures Trading Commission (CFTC). Additionally, the court ordered several relief defendants to disgorge a total of $760,375 of ill-gotten gains.
The defendants EJS Capital Management (EJS), Edward J. Servider and Alex Vladimir Ekdeshman were found guilty of soliciting and accepting $2 million from approximately 112 members of the general public to trade forex and misappropriated most of the customer funds for their own personal and business expenses. This happened between April 2013 and May 2014.
The court further found that the defendants provided false account statements to customers that listed purported profits from forex trading, although no customer funds were traded in forex and no profits were generated from forex trading. In addition, the court found that EJS’s website contained a false performance report of EJS’s trading profits.
As a result, the court ordered defendants EJS, Ekdeshman, and Servider to jointly 1) pay over $2.3 million in restitution to defendants’ victims; 2) disgorge ill-gotten gains of over $2.3 million; and 3) pay over $7 million in civil monetary penalties – a total of $11.6 million. The CFTC, however, cautions that the defendants may not have sufficient funds to pay the sums.
In a related criminal case Alex Ekdeshman was sentenced to 87 months in prison and to pay restitution to the victims of his fraud. He is also banned for a lifetime from registering as a broker with the CFTC.