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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
KOSOVA SECURITIES FOREX COMMISSION FUNDS COMPLAINT ACCOUNT ASSET FRAUD INTERNET ARIZONA ACT REPORT ENFORCEMENT COMPLAINT EXCHANGE COMMISSION CHARGES FOREIGN CURRENCY TRADING RESTRAINING ORDER ACC INJUNCTION FREEZE LOST SECURE DEFENDANTS WITHDRAW RISK REALITY ARIZONA CORPORATION |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16055 / February 8, 1999
SECURITIES AND EXCHANGE COMMISSION v. FOREX ASSET
MANAGEMENT, L.L.C., ET AL. Civil Action No. 3:99-CV-0256-P
SEC CHARGES SECURITIES FRAUD IN INTERNET FOREIGN CURRENCY
TRADING SCHEME
On February 5, 1999, the Commission charged a Dallas company
and its president with fraud, and sought a temporary
restraining order, preliminary injunction, asset freeze,
accounting and expedited discovery. Investors may have lost
as much as $2 million in the fraudulent foreign currency-
trading scheme. The Commission secured a temporary
restraining order against the defendants to prohibit their
attempted withdrawal of $750,000 of investor funds from a
brokerage account of a registered securities and commodities
firm.
The Commission’s complaint names Forex Asset Management,
L.L.C. ("Forex") and its president, Jason N. Kosova
("Kosova") as defendants. Judge Fitzwater signed the
temporary restraining order granting the relief sought by
the Commission and also appointed a receiver to assume
responsibility for the company and secure assets for the
benefit of investors. Specifically, the complaint alleges
that:
* Since October 1997, Forex and Kosova raised at least $3.7
million from at least 40 investors in three states
utilizing radio infomercials, the internet, "cold calls,"
and seminars.
* Forex and Kosova promised to invest investor funds in
foreign currency transactions, and to engage in "trading
techniques and risk control strategy" to achieve very
high rates of return with limited risk. Forex and Kosova
also sent clients monthly account statements, which
falsely reflected profits earned in their accounts.
* In reality, only about $600,000 of investor money was so
invested. Instead, Forex and Kosova pooled investor
monies and used these funds for other purposes. At least
$2 million of investor funds are presently unaccounted
for.
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