The United States Commodity Futures Trading Commission (CFTC) has taken action against a fraudulent Forex scheme and the individuals associated with it.
On September 15, 2021, the CFTC filed a complaint with the North Carolina Western District Court. The document names Storm Bryant, Elijah Bryant, CapitalStorm LLC, generationblack LLC , and ncome LLC as defendants.
According to the complaint, seen by FX News Group, from at least March 2018 through the present, Storm Bryant and Elijah Bryant III, individually and through Capital Storm, Generation Black, and Ncome, have fraudulently solicited, and continue to fraudulently solicit, existing and prospective clients who are not eligible contract participants (ECPs) to engage in retail transactions in off-exchange Forex on a leveraged, margined, or financed basis.
The CFTC alleges that the defendants have received at least $1.05 million from not less than ninety-four clients during the Relevant Period, all of which the defendants misappropriated. Not less than $50,870 was sent back to clients as purported forex trading “profits” in the nature of a “Ponzi” scheme.
The complaint further states thatCapital Storm, Generation Black, and Ncome, without registering with the Commission as commodity trading advisors (CTAs), and Defendants Storm and Elijah Bryant, without registering as associated persons (APs) of a CTA, respectively, solicited and continue to solicit clients or prospective clients through in-person solicitations as well as social media platforms such as Facebook and Instagram, including a website operated by Storm and Elijah Bryant, www.capitalstorminvestments.com, to induce non-ECP, retail clients to send Defendants funds.
Storm and Elijah Bryant, both individually and as agents of Capital Storm, Generation Black, and/or Ncome, hold themselves out as highly successful Forex traders who generate tremendous returns for their clients. When the Bryants successfully induced non-ECP, retail clients to send them funds, the Bryants misappropriated the funds by receiving them or moving them into accounts held by Storm and/or Elijah Bryant in their own names and using the funds to purchase jewelry, rent homes, travel to Europe, and fund the Bryants’ personal trading accounts.
In addition, the complaint alleges that the defendants, by and through the Bryants, made material misrepresentations in their solicitations including by misrepresenting that: (a) clients’ funds would be used to open trading accounts in their names and to trade forex on their behalf; (b) Defendants were successful and profitable traders who generated tremendous returns for their clients; (c) Defendants generated daily returns trading clients’ forex accounts as high as 27.8% in a single day; and (d) Defendants were not required to be registered with the Commission to conduct their business operations.
All of these representations were false.
At the Bryants’ instruction, clients wired funds to bank accounts held in the names of Storm and/or Elijah Bryant. Upon information and belief, none of the at least $1.05 million received by the defendants from clients was used to trade forex on behalf of clients. The defendants did not open any U.S. forex trading accounts during the Relevant Period, and did not hold a power of attorney at any registered futures commission merchant (FCM) or retail foreign exchange dealer (RFED) to trade forex in a client’s account. Upon information and belief, all forex accounts Defendants opened offshore were in the names of Storm Bryant or Elijah Bryant.
The CFTC says that the defendants have violated and are violating 7 U.S.C. § 6b(a)(2)(A)-(C) (2018), and 17 C.F.R. § 5.2(b)(1), (3) (2020), by engaging in fraud in connection with off-exchange, retail forex transactions; and Capital Storm, Generation Black, and/or Ncome have violated and are violating 7 U.S.C. § 6o(1)(A), (B) (2018), by engaging in fraud while acting as commodity trading advisors and violating 17 C.F.R. § 4.30(a) (2020), by soliciting, accepting, and receiving in their own name funds from existing and prospective clients purportedly for purposes of trading Forex.
In addition, during the Relevant Period, Capital Storm, Generation Black, and Ncome, without being registered with the CFTC, acted and continue to act as CTAs by, in exchange for compensation, exercising discretionary trading authority or obtaining written authorization to exercise discretionary trading authority over accounts for or on behalf of others who were not ECPs in connection with retail forex transactions. As a result, Capital Storm, Generation Black, and Ncome violated and are violating 7 U.S.C.
In this litigation, CFTC seeks to enjoin the defendants’ unlawful acts and practices, and to compel their compliance with the CEA and Regulations.
Also, the CFTC seeks civil monetary penalties for the defendants’ violations of the CEA and Regulations, and remedial ancillary relief, including, but not limited to, trading and registration bans, restitution, disgorgement, rescission, pre- and post-judgment interest, and such other relief as the Court may deem necessary and appropriate.
