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CFTC Gets Federal Order on FX Fraudsters

The Commodity Futures Trading Commission says it has
obtained a federal court consent Order against defendants
Alex Ekdeshman of New Jersey, and Paramount Management,
requiring them to pay $1,146,000 in restitution to defrauded
customers and a $1,337,000 civil monetary penalty.

The Consent Order of Permanent Injunction also imposes
permanent trading and registration bans against the defendants
and prohibits them from violating the anti-fraud provisions of the
Commodity Exchange Act, as charged.

The Order stems from a CFTC Complaint filed against the
defendants on June 26, 2013. The CFTC’s Complaint charged
Ekdeshman, individually and as the agent of Paramount, with
solicitation fraud and misappropriating “the vast majority” of
customer funds for business expenses. Specifically, the Complaint
charged the defendants with operating a fraudulent scheme that
solicited more than $1.3 million from approximately 110 retail
customers to engage in leveraged or margined foreign currency
transactions with unregistered off-shore counterparties. 

The defendants allegedly advised customers that FX trading
accounts would be opened in the customer’s name and would be
traded by the defendants on behalf of the customer.

The defendants, through a telemarketing sales force and a
“Performance Record” linked to their website, also touted
Paramount’s successful trading record as having yielded an average
monthly return of 4.6% over a 20-month period, based on the
performance of Paramount’s proprietary trading software system,
according to the complaint. However, the court’s Order finds that,
contrary to the claims made during the solicitations, the defendants
did not manage or trade any customer account, and thus
Paramount’s customers neither made any actual FX trades nor
received delivery.

The Order also finds that the defendants misappropriated all
customer funds for Ekdeshman’s personal benefit and failed to
disclose to actual or prospective customers that they were
misappropriating customer funds. To conceal their fraud, the Order
finds that, during all phases of the scheme, the defendants issued
false account statements to their customers, as no individual customer
accounts were ever created and no profits were ever generated. 

Paul Gogliormella

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