CFTC Charges Forex Trading Firm And Its Principal With Fraud And Misappropriation – Exchange News Direct

The Commodity Futures Trading Commission today filed a civil enforcement action against Erik J. Hass and his company Simply Gains Inc., both of Junction City, Oregon, in the United States District Court for the District of Oregon, charging them with fraud, misappropriation, and failing to register with the CFTC as required.

The complaint charges that the defendants solicited at least $2.1 million from at least 21 individuals to fund their foreign currency (forex) commodity pool operation. Despite assurances that depositors could not lose more than 20% of the funds they deposited, the defendants lost over $1 million trading forex and misappropriated at least $415,000 more to spend on Hass’s mortgage, credit card debt, and a Caribbean cruise.

The complaint also alleges that the defendants fraudulently solicited prospective pool participants by misleading them about Hass’s experience, expertise, and investment track record while promising future profitability with limited downside. The complaint further alleges that to conceal their misappropriation and unprofitable forex trading, the defendants sent pool participants false account statements that purported to show profits.

In its continuing litigation, the CFTC seeks restitution to defrauded individuals, 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.

Related Criminal Action

On June 9, 2020, the United States Attorney for the District of Oregon indicted Hass on five counts of wire fraud, two counts of mail fraud, and one count of money laundering. [See United States v. Hass, 6:20-cr-00178 (D. Or.)]

The CFTC acknowledges and thanks the United States Attorney’s Office for the District of Oregon and the Oregon Division of Financial Regulation for their diligence in pursuing this matter.

The Division of Enforcement staff members responsible for this action are Douglas Snodgrass, Joseph Patrick, Bryan Hsueh, Joseph Konizeski, Scott Williamson, and Robert Howell. 

* * * * * * *

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 (Forex) Trading Fraud Advisory, to help customers identify this sort of scam.

The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

RELATED LINKS

Leave a Reply