CFTC Charges Helmut H. Weber with Forex Fraud; Update on Ronald W. Smith, Jr. Fraud Charges

On the Eve of New Forex Registration Requirements, CFTC Finds More Fraud

In two separate actions, CFTC charged Arizona resident Helmut H. Weber of Weber Capital Management with solicitation fraud and misappropriation of customer funds, and CFTC obtained a preliminary injunction against Virginia resident Ronald W. Smith, Jr. of Safeguard 3030 Investment Club in relation to charges against him for solicitation fraud, misappropriation of customer funds, and the issuance of false account statements to customers.

Overview of Weber Case

Updates on Smith Case

To read about the Smith case, please click here.

To read the Weber Complaint, click here.

To read the Smith Order, click here.

The full text of the CFTC press releases is reprinted below and can also be found by clicking on the following links: Weber and Smith.

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Release: 5794-10

For Release: March 11, 2010

CFTC Charges Scottsdale, Arizona Resident Helmut H. Weber d/b/a Weber Capital Management with Solicitation Fraud and Misappropriation in Forex Scheme

Defendant used three websites to solicit customers and misappropriated approximately $280,000 of customer funds.

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed a complaint against Helmut H. Weber d/b/a Weber Capital Management (WCM) of Scottsdale, Arizona, charging Weber with operating a fraudulent off-exchange foreign currency (forex) scheme.

The CFTC complaint, filed in the U.S. District Court for the District of Arizona, Phoenix Division on March 9, 2010, alleges that Weber, through personal solicitations and his websites — www.weberfx.com, www.webercapitalmanagement.com and www.newtempsite.com — fraudulently solicited customers to invest at least $280,000 in forex trading. The complaint also alleges that, contrary to Weber’s representations, only a fraction of customer funds were actually traded and that the majority of the funds were misappropriated to pay for Weber’s lavish lifestyle.

Specifically, the complaint alleges that, from at least June 2008 through January 2009, Weber falsely told customers that he was a successful and experienced forex trader, promised profits of three percent to 10 percent monthly on investments and claimed that WCM was registered with the National Futures Association and the CFTC. Based on these false representations, many of his clients recommended Weber to their friends and family.

Additionally, Weber continued to solicit prospective and existing clients even after the Arizona Corporation Commission, Securities Division, served a “cease and desist” order upon him on September 12, 2008, according to the complaint. The order required him to stop certain forex business activities and to close two of his websites. The state of Arizona subsequently on October 22, 2008, indicted him on 29 criminal violations, including fraud and theft, related to his forex solicitation activities. The criminal charges against Weber remain pending.

In its continuing litigation, the CFTC seeks restitution of funds to defrauded customers, the repayment of ill-gotten gains, civil monetary penalties and permanent trading and registration bans.

The CFTC appreciates the assistance of the Arizona Corporation Commission, Securities Division, and the Office of the Arizona Attorney General.

The following CFTC Division of Enforcement staff members are responsible for this case: Timothy J. Mulreany, Tracey Wingate, Michael Amakor, Paul Hayeck and Joan Manley.

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Release: 5793-10
For Release: March 11, 2010

Federal Court Issues Preliminary Injunction against Virginia Resident Ronald W. Smith, Jr., Doing Business as Safeguard 3030 Investment Club, in Forex Fraud Scheme

Order continues court’s asset freeze against Smith and prohibits him from further federal commodities law violations.

Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) obtained a preliminary injunction against defendant Ronald W. Smith, Jr., d/b/a Safeguard 3030 Investment Club, of Vansant, Virginia, after a federal court held at hearing where the defendant also appeared.

The order, arising from a CFTC anti-fraud enforcement action against Smith filed on February 23, 2010, continues the asset freeze the court entered against Smith at the outset of the CFTC’s action. The order also prohibits Smith from further violations of federal commodities law. Chief Judge James P. Jones of the U.S. District Court for the Western District of Virginia entered the order on March 5, 2010.

The CFTC’s complaint charges Smith with fraudulently soliciting at least $800,000 from customers and misappropriating customer funds in an off-exchange foreign currency (forex) scam. The complaint also charges Smith with issuing false statements to customers to conceal the fraudulent misuse of funds. (See CFTC Press Release 5734-10, February 26, 2010, and CFTC v. Ronald W. Smith, Jr. et al., No. 1:10CV00009 [W.D. Va. 2010].)

In its continuing litigation against Smith, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties and a permanent injunction.

The following CFTC Division of Enforcement staff are responsible of this case: August A. Imholtz III, Kara Mucha, James Garcia, Kassra Goudarzi, Michelle Bougas, Michael Solinsky, Gretchen L. Lowe and Phyllis J. Cela.

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Other related forex law articles include:

Bart Mallon, Esq. of Mallon P.C. runs the Forex Law Blog and provides forex registration service through forexregistration.com. Mr. Mallon also runs the Hedge Fund Law Blog. He can be reached directly at 415-868-5345.

March 18, 2010 | Filed Under Forex Press Release

 

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One Response to “CFTC Charges Helmut H. Weber with Forex Fraud; Update on Ronald W. Smith, Jr. Fraud Charges”

  1. Globex FX Sued For Trademark Infringement | Forex Law Blog on April 21st, 2010 2:22 pm

    [...] CFTC Charges Helmut H. Weber with Forex Fraud; Update on Ronald W. Smith, Jr. Fraud Charges [...]

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