A U.S. federal court has ordered an Ontario man to pay almost US$2.3 million in connection with an alleged foreign currency Ponzi scheme.
The U.S. Commodity Futures Trading Commission (CFTC) announced that Patrick Cole and his company, Global Strategic Marketing, Inc. (GSM) have been ordered to pay disgorgement of US$1.15 million and civil monetary penalties of US$1.15 million, along with imposing permanent trading and registration bans, as a result of a CFTC enforcement action against them.
The CFTC reports that the court’s order finds that they participated in marketing a fraudulent forex investment program offered by another defendant, Complete Developments, LLC (CDL); that GSM made false statements, including claims about generating high returns for low risk, and the purported experience of CDL’s forex trading team. It also finds that GSM made the false statements based on information from CDL that it did not independently verify; and that it made false statements about its own conduct.
The order finds that “GSM’s misrepresentations to potential investors were false, misleading, and material and that GSM’s conduct, including not conducting adequate due diligence about GSM and ignoring investor complaints, establishes that GSM acted with reckless disregard as to whether its statements to potential investors were true.” It also ruled that Cole is liable for GSM’s violations because he controlled the firm and “had actual knowledge of all of GSM’s activities”.
Back in May 2013, the court entered a judgment against CDL, its principals, and Investment International Inc., ordering them to pay over US$23 million in civil monetary penalties and restitution in connection with the scheme.