Key Insights
- A U.S. court ordered forex trading firm ROFX and related entities to pay over $225 million for defrauding customers of $57 million.
- ROFX falsely claimed to use a successful automated forex trading system but misappropriated all customer funds.
- The orders include over $56 million in restitution, $169 million in penalties, and permanent trading bans.
WASHINGTON (MarketsXplora) – The U.S. derivatives regulator said on Tuesday that a federal court has issued orders requiring forex trading firm ROFX and related parties to pay over $225 million after being found liable for a fraudulent currency trading scheme that misappropriated more than $57 million from customers.
The orders from the U.S. District Court for the Southern District of Florida stem from a 2022 lawsuit by the Commodity Futures Trading Commission (CFTC) against nine defendants including ROFX operators Jase Davis, Borys Konovalenko, Anna Shymko and Alla Skala, as well as five companies through which ROFX operated.
In a default judgment order issued on April 22, the court found the nine defendants liable for fraud, misappropriation and registration violations related to ROFX’s forex trading solicitation, the CFTC said.
The order requires the defendants to pay over $56 million in restitution to defrauded customers and a $169 million civil penalty. It also permanently bans them from trading in CFTC markets and requires they be deregistered with the regulator.
In a separate order on May 8 against remaining defendant Timothy Stubbs, an Atlanta accountant, the court ordered him to pay over $467,000 in civil penalties and restitution.
The CFTC said that from 2018 to 2021, ROFX and the defendants fraudulently solicited at least $57.5 million from U.S. and overseas customers for purported foreign exchange trading, falsely claiming to use a highly successful automated trading system.
However, the orders found the defendants misappropriated all customer funds by transferring the money to offshore entities and personal accounts with no legitimate trading.
The ROFX companies also operated as unregistered futures commission merchants by soliciting retail forex orders and accepting customer funds, the orders said.
The judgments resolve the CFTC’s case against all defendants.
ROFX operated through websites like ROFX.net which have now been shut down.
The CFTC has repeatedly warned investors to be wary of websites offering forex trading advice or services and only deal with registered providers.