CFTC Charges Los Angeles, California Resident Jin Choi and His Companies, Apuro Holdings Ltd. and JCI Holdings USA with Forex Fraud and Registration Violations
May 24, 2018
Washington, DC –The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Central District of California, Western Division, charging Defendants Jin Choi of Los Angeles, California, and his companies, Apuro Holdings Ltd. (Apuro) d/b/a ApuroFX and JCI Holdings USA (JCI) d/b/a JCI Trading Group, LLC, with off-exchange retail foreign currency (forex) fraud and failure to register with the CFTC as a Commodity Trading Advisor and Associated Person of a Commodity Trading Advisor, as required.
The Complaint alleges that, from at least January 2014 through the present, Choi, individually and as agent and principal of Apuro and JCI, has fraudulently solicited at least $350,600 from not less than six individuals (clients) for the purported purpose of trading off-exchange leveraged or margined retail forex contracts on their behalf. Choi allegedly solicited and continues to solicit clients and prospective clients in person and at investor seminars hosted by Choi in the United States and abroad, through social media services (including Facebook and Instagram), and through various websites operated by Choi. As alleged, in their solicitations, Defendants, by and through Choi, made material misrepresentations and omissions concerning Choi’s trading expertise and successful track record. Defendants also allegedly misrepresented that all of clients’ funds would be used to open trading accounts in their names to trade forex on their behalf and that ApuroFX is a CFTC-registered Futures Commission Merchant.
Client Funds Allegedly Misappropriated to Support Choi’s Lavish Lifestyle
In fact, however, the Complaint alleges that Defendants never opened any trading accounts in clients’ names and never conducted any trading on behalf of clients. Instead, Defendants misappropriated all of the at least $350,600 in client funds to support Choi’s lavish lifestyle and to return approximately $24,000 to certain clients as purported “profits” in the manner of a “Ponzi” scheme, as alleged in the Complaint. Defendants allegedly used the majority of clients’ funds to pay for Choi’s personal expenses, including paying for the rental of a Beverly Hills condominium; the purchase and lease of luxury automobiles; shopping sprees at high-end retailers mostly located on Rodeo Drive in Beverly Hills, California; travel to Las Vegas, Nevada, for gambling and luxury hotel stays; the purchase of cell phones; and for cash withdrawals.
In its continuing litigation, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act, as charged.
The CFTC appreciates the assistance of the Hong Kong Securities and Futures Commission, the Financial Services Agency of Japan, and the British Virgin Islands Financial Services Commission. CFTC Division of Enforcement staff members responsible for this case are Timothy J. Mulreany, Danielle Karst, Jim Holl, George H. Malas, Anthony Homer, Erica Bodin and Paul G. Hayeck.
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CFTC’s Foreign Currency (Forex) Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.