The Commodity Futures Trading Commission has filed a civil enforcement action. It has been filed in the US District Court of New Jersey. It includes two parties facing the charges. The parties are Thomas Plaut and Arthur Dembro.
Both of them are allegedly guilty of committing fraud through their forex activities from March 2012 to September 2018. As per the reports, Thomas Plaut and Arthur Dembro defrauded thousands of retail forex customers across the globe.
The filing of the civil enforcement action was announced by CFTC today through its official press release.
The case has a solid background with a long list of allegations against WorldWideMarkets and Tab Networks. Both the companies have been charged with acting as one entity to defraud the retail customer worldwide.
The fraudulent activities were performed through forex transactions, cheating over 14,000 retail customers. These activities functioned from March 2012 to September 2018.
Thomas Plaut allegedly based WorldWideMarkets in the British Virgin Islands. The purpose was to evade American regulations and customer protection regulations that apply specifically to retail customers.
Additionally, Thomas Plaut and Arthur Dembro have been charged with not maintaining a level of net capital that is considered sufficient as per the US regulations.
The list goes on to include both parties misappropriating the funds collected from customers. The charges filed against Thomas Plaut and Arthur Dembro state that both of them diverted at least $4.7 million worth of funds to pay the salaries & benefits to their employees, operating expenses, and cash distribution to Thomas Plaut.
A point of misrepresenting their customers has also been noted in the civil enforcement that has been filed by CFTC.
It accuses both of them of misrepresenting their customers that the fund collected would be securely kept in a segregated bank account.
Thomas Plaut and Arthur Dembro failed to maintain assets, the value of which should have matched their retail forex obligation in the country.
Based on the information obtained from the press release of CFTC, WorldWideMarkets and Tab Networks have been charged for acting as a single entity to commit forex fraud with nearly 14,000 customers across the globe.
Thomas Plaut and Arthur Dembro have been charged with fraud along with other violations that have been mentioned above.
The complaint highlights that Arthur Dembro assisted both companies in committing the fraud. He assisted during his tenure with them as a Chief Financial Officer at both companies.
Vincent McGonagle, the Acting Director of Enforcement, issued a statement saying that the complaint filed highlighted the importance of meeting all the registration requirements laid down by CFTC.
It has been further underlined that Thomas Plaut and Arthur Dembro are charged with ignoring all the mandatory requirements and misappropriating funds.
CFTC has issued an advisory to help people report such instances to the department. One can call CFTC on the free hotline number 866-FON-CFTC, or 866-366-2382. The department can also be connected through its Whistleblower Office.