The US Commodity and Futures Trading Commission, or CFTC, has announced today that it will file a complaint with the US Florida Middle District Court. This filing will be against Alan Friedland and his two Florida-based companies: Compcoin LLC, as well and Fintech Investment Group, Inc.
The complaint accuses all the aforementioned defendants of the fraudulent solicitation of over $1.6. According to the complaint, they solicited these funds from their customers through a leveraged off-exchange forex scheme
The Typical False Promises
According to the complaint, the Defendants had, starting at least in 2016 and going through to 2018, had fraudulently solicited prospective customers and customers to purchase an asset by the name of Compcoin. To do this, the defendants had falsely promised a range of things, including that Compcoins would allow its customers to gain access to ART, Fintech’s proprietary forex trading algorithm. They proceeded to falsely advertise the ART algorithm as something that would deliver high rates of return for its customers.
Customers Left With Worthless Assets
Through the marketing of Compcoin, as the complaint stated, the defendants had further falsely represented the function and use of Compcoin. Furthermore, they claimed that ART was primed to release on the open market at large. As one would imagine, however, the reality was that the defendants were aware that the customers would not be capable of lawfully using ART, according to the complaint.
This is due to Fintech needing approval from the National Futures Association (NFA), something it’s never even done, according to the CFTC. The end result, as the complaint states, is these Compcoin purchasers were left without any form of promised access to ART, and were left with what was essentially a worthless asset.
Further Fire From The NFA
With this complaint failed, the CFTC is seeking restitution, monetary penalties, as well as permanent bans on registration and trading. Furthermore, they’re seeking a permanent injunction against the defendants in regard to further violations of the Commodity Exchange Act, as well as CFTC regulations.
On the 30th of March, 2020, the NFA had further filed a member responsibility action against Fintech. Furthermore, an associated responsibility action was filed against Friedland, both being based on their overall failure in cooperating with the NFA to provide relevant information.
This information was in regards to the complaint the CFTC had filed against them. As such, the action issues a summary suspension for both Friedland and Fintech from membership of the NFA. It further prohibits the defendants from accepting or soliciting any form of customer funds in regards to forex trading.