N.Y. and N.J. foreign currency traders to pay $1.8 million for false claims

The U.S. Commodity Futures Trading Commission touted their win in court over Forex Capital Trading Group, Forex Capital Trading Partners, both of New York, and Highland Stone Cap. of New Jersey in a federal lawsuit over the firms’ performance claims.

According to the CFTC, Judge Katherine B. Forrest of the U.S. District Court for the Southern District of New York entered a default judgment against the firms and ordered them to pay $1.35 million in civil penalties and to disgorge $450,764 in gains to be distributed to customers. The firms are banned against trading and registering as forex traders.

The decision comes six months after the CFTC brought a civil actions against the firms charging them with falsely claiming they were successful forex traders and even produced a 51.9 percent gain for customers in 2010.

According to the CFTC, the companies’ customers actually lost $1.2 million in 2010. But the firms’ solicitations attracted 106 customers who invested $2.8 million.

Rob Varnon