U.S District Court in South Carolina Orders $7.5 Million in Penalties, Restitution and Disgorgement in Forex Ponzi Scheme

In U.S. Commodity Futures Trading Commission v. Ronald E. Satterfield et al., Case No. 2:10-CV-2893-RMG, the CFTC obtained two consent orders of permanent from the U.S. District Court for the District of South Carolina.  One order requires Ronald E. Satterfield to pay $957,146 in restitution and a $2,871,438 civil monetary penalty, and the other order required Nicholas Bos to pay $849,146 in restitution and a $2,547,438 civil monetary penalty, for operating a foreign currency (forex) Ponzi scheme.  The Bos order also requires relief defendant Patricia Bos to disgorge $295,000 in ill-gotten gains.  Both orders impose permanent injunctions against violating Sections 4b(2)(A)-(C) of the Commodity Exchange Act, and impose permanent trading and registration bans.

The CFTC complaint filed on November 8, 2010, charged the defendants with operating a forex Ponzi scheme involving the fraudulent solicitation of at least $3.3 million from at least 70 people in South Carolina, North Carolina, Michigan, and Maryland.  The defendants solicited and accepted funds from retail investors to engage in leveraged or margined forex transactions.   Satterfield, a church pastor, misrepresented that he was a successful forex trader, falsely guaranteed customers monthly returns of two to four percent based on his forex trading and falsely claimed that there would be no risk to customers’ principal investment.  Although he received at least $3.3 million from customers, Satterfield placed only about $1.9 million in known forex trading accounts, virtually all of which was lost as a result of his unsuccessful forex trading.  To conceal and continue their fraud, Satterfield and Bos issued false customer account statements reflecting the promised returns and forex trading profits, when in reality the forex trading resulted in losses.  The false account statements also allegedly concealed the misappropriation of customer funds used for personal expenses such as the purchase of a personal residence.

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