SEC Sues Currency Trading Firm
Federal regulators sued a defunct Newport Beach brokerage house and its former owners Thursday, saying the company pulled in more than $16 million in sales commissions in an alleged investment fraud.
Currency Trading International Inc. persuaded more than 900 clients to invest in foreign currency options, telling them they could double or triple their money within days, the U.S. Securities and Exchange Commission’s complaint said.
Instead, more than 90% of the firm’s clients lost money on their trades, the SEC said.
“We’re talking huge losses,” said Lisa Gok, the agency’s assistant regional director for enforcement. One investor lost $800,000, she said.
Currency Trading also charged clients 8% commissions for purchases and another 8% commission for sales, eating up virtually all gains, the government’s complaint alleges.
If customers complained, the company refused to return their funds or to allow them to control their accounts, the SEC said.
Currency Trading International, founded in 1994, closed in late 1998, after the Orange County Boiler Room Apprehension Task Force--a multi-agency law enforcement group that targets telemarketing fraud--raided the firm’s offices.
The raid came after an Idaho grand jury indicted owners Brian R. Moore, 38, of Bath, Ohio, and Craig A. Cunningham, 42, of Irvine and seven employees on charges of defrauding investors through an affiliated company, Cleveland-based Options Trading Inc.
Several employees were arrested at Options Trading’s offices in Austin, Texas, and Akron, Ohio.
The SEC’s civil complaint accuses Currency Trading International, Moore, Cunningham and four employees of securities fraud. The employees are Craig Wiginton, 48, of Anaheim; Christian J. Weber, 27, of Huntington Beach; James R. Kelsall, 28, of Barberton, Ohio; and Robert Shane Jones, 35, of Fairlawn, Ohio.
If the company is found liable, the SEC has asked that it return all the commissions, plus fines and interest.
Times staff writer P.J. Huffstutter contributed to this report.
