CFTC Busts Forex Ponzi Scheme

Mar 16 2010 | 1:34pm ET

Another day, another ‘alleged’ Ponzi scheme is busted.

The U.S. Commodity Futures Trading Commission today announced that it has charged Patrick Rakotonanahary and Cyber Market Group, both of Punta Gorda, Florida, with operating a multi-million dollar Ponzi scheme.

The U.S. Commodity Futures Trading Commission charges that, since at least June 2008, Rakotonanahary, the president and chief executive officer of Cyber Market, induced customers—most of them from Hawaii—to purportedly loan them money to trade forex on their behalf. The CFTC complaint alleges that the defendants promised customers weekly payments of 4%-10%, knowing that they lacked the funds to make such payments.

In addition to allegedly paying old investors with new investors’ money, 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 $8 million in Cyber Market’s forex trading account when, in fact, the account contained less than 1% of that amount.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...