Forex Fraud Exposed | California Man Hit with $9M Penalty by CFTC

A California man and his companies have been ordered by a federal court to pay $9 million for defrauding investors in a foreign currency (forex) trading scheme. Eshaq Nawabi, who operated under the business names Nawabi Enterprise and Hyperion Consulting Inc., is required to pay $4.5 million in restitution to victims and an additional $4.5 million civil penalty.

The Commodity Futures Trading Commission (CFTC) has declared the resolution of a case against Eshaq M. Nawabi, who operates as Nawabi Enterprise, and Hyperion Consulting Inc., through a consent order entered in the U.S. District Court for the Eastern District of California. This case pertains to defrauding investors in a foreign currency (forex) trading scheme, with Nawabi mandated to pay $4.5 million in restitution to victims along with an additional $4.5 million civil penalty.

This ruling builds upon a previous consent order issued on December 6, 2023, wherein the defendants were found liable for fraud. This earlier order not only prohibits them from future violations of the Commodity Exchange Act and CFTC regulations but also permanently bars their registration with the CFTC and trading on any registered entity. It signifies the complete resolution of the CFTC action initiated on April 26, 2022.

The order specifies that between October 2019 and April 22, 2022, the defendants enticed pool participants to invest money for forex trading. They employed fraudulent tactics, including misrepresentations and omissions, such as promising historically large profits of 8–25% per month with minimal risk. Despite assuring investors of trading forex with the deposited funds and facilitating prompt withdrawals, the defendants diverted the money for personal gain and to sustain a Ponzi-like scheme, fabricating false account statements to mask their actions. Despite requests, they failed to return the funds to investors.

The CFTC emphasizes that although the court mandated restitution, there's a chance that victims may not recover their entire investment due to Nawabi's potential financial limitations.

The CFTC remains dedicated to safeguarding investors from fraud, offering various resources such as the Forex Trading Fraud Advisory to educate the public on identifying forex scams. They also advise verifying a company's registration with the CFTC before investing and exercising caution with unregistered entities. The NFA BASIC can be used to confirm a company's registration status.

In the aftermath of cases like the one involving Eshaq M. Nawabi and Hyperion Consulting Inc., where investors were defrauded in a forex trading scheme, tools like WikiFX prove invaluable. By providing detailed information about forex brokers, including their regulatory status, track record, and user feedback, WikiFX empowers investors to make informed decisions and avoid falling victim to fraudulent schemes. Investors can utilize WikiFX to verify the legitimacy of brokers and ensure compliance with regulatory standards, mitigating the risk of financial loss. In situations where individuals are enticed by promises of unrealistically high returns, WikiFX serves as a vital resource for due diligence, enhancing transparency and safeguarding investors' interests. Download yours for free now from Google Play/App Store!