U.S. securities regulators say they have halted a suspected Ponzi scheme that it alleges was directed by a Canadian man.
The U.S. Securities and Exchange Commission announced Friday that it has charged New Futures Trading International Corp., a New Hampshire-based business, directed by a Canadian resident, with obtaining over US$1.3 million from investors in a fraudulent Ponzi scheme. It also said that the U.S. District Court in New Hampshire has issued a temporary restraining order that, among other things, freezes the assets of the company and its principal and prohibits them from continuing to solicit or accept investor funds. The allegations have not been proven.
In its complaint, the SEC alleges that a Kendal, Ont. resident, Henry Roche, through New Futures Trading International Corp. has raised over US$1.3 million from at least 14 investors in nine states and Ontario, through the sale of promissory notes purportedly yielding either 5%-10% per month, or a 200% return within 14 months. It alleges that he represented to some investors that their funds would be invested in bonds, Treasury notes and/or 10-year Treasury note futures contracts, and told others that the funds would be invested directly in New Futures, an online futures day-trading training business he was operating, which held course online and in Toronto.
The complaint alleges that, instead of using the funds for either purpose, Roche used approximately US$937,000 to make ‘interest’ payments to investors in prior Roche-controlled entities, including Masters Palace, Inc., and Third Realm Institute, and misappropriated at least another US$359,000 to support his lifestyle and operate a horse breeding venture, Majestic Horses.
The SEC is seeking a permanent injunction, disgorgement of ill-gotten gains, and a civil monetary penalty. It acknowledges the assistance of both the Ontario Securities Commission and the New Hampshire Bureau of Securities in the case.