by Regulators in the United States are up and running and leaving no stone unturned to flush out irregularities in the financial sector.
On Wednesday, April 13, the CFTC filed a case against Kay Yang alongside her two companies, AK Equity Group LLC and Xapphire LLC, over suspected involvement in high-wired forex fraud.
Moreover, the regulatory body charges Yang and her two companies with illicit financial dealings and misappropriation relating to a foreign exchange scheme. They are also hit with the charge of unlawfully soliciting funds from 67 investors, with the funds estimated to be $15.7 million.
The financial regulatory body also fingered Yang’s husband, Chao Yang, among the defendants for his role as a recipient of the scheme’s investor funds.
On the other hand, the United States Securities and Exchange Commission (SEC) has also filed an independent charge against Yang and her two companies for the same offense.
Scheming to Defraud
According to the complaint lodged against Yang and her two companies, the fraudulent trading scheme was operational from April 2017 to March 2020. Yang and her companies approached investors, and funds were solicited from them with the fraudulent intent of investing in forex trading.
According to the case file, the two companies made numerous fake representations to the group of existing and potential investors in the trading scheme. Part of the false claims displayed to the investors includes the company’s management of an extensive investment portfolio running into hundreds of millions of dollars in multiple investment vehicles and making huge monthly returns.
However, the accused parties disclosed that all the accumulated investment proceeds were moved to forex trading and adhered to investment strategies like low leverage ratios and reasonable trading periods to maximize enormous returns for the investors.
But the CFTC refuted the claims, calling them “false” because the investors in the scheme routinely suffer huge losses due to the trading pattern adopted by the companies.
Yang was accused of using investors’ funds to cover her personal expenses. She is alleged to have transferred about $200,000 to her personal bank account and a further $1.4 million to her husband’s. Another $1 million was transferred to a joint statement that bore her name and her husband’s.
The Likely Outcome of the Case
The CFTC is currently seeking the full reimbursement of the funds solicited back to the trading pool participants and the complete surrender of all ill-gotten gains to the authorities.
Furthermore, the agency plans to impose hefty civil fines and permanent registration and operational bans alongside a permanent injunction on the accused parties and their companies to forestall future happenings.
Both the SEC and the CFTC have previously resolved to work together to checkmate the activities of illegal financial dealings in the United States. The SEC, in particular, has been in a running battle with numerous firms in the digital asset industry where issues of irregularities have been leveled against Ripple and Tesla.
The battle line has been drawn.
