The U.S. Commodity Futures Trading Commission (CFTC) announced the entry of a consent order in the U.S. District Court for the Eastern District of California imposing damages and a civil monetary penalty against Eshaq M. Nawabi, d/b/a/ Nawabi Enterprise , and Hyperion Consulting Inc. The order requires the defendants to pay $4.5 million in restitution to the victims of the fraud and a $4.5 million civil monetary penalty.
Today’s order follows a prior consent order entered by the court on December 6, 2023, which, in addition to holding the defendants liable for fraud, exempts them from future violations of the Commodity Exchange Act and CFTC regulations, as alleged in the complaint , and permanently bars them from registering with the CFTC and trading in any registered entity. Today’s order fully resolves the CFTC action filed on April 26, 2022.
The order finds that from approximately October 2019 to April 22, 2022, the defendants solicited participants to deposit money into forex trades. To induce group participants to send them money, the defendants made fraudulent and material misrepresentations and omissions, including: the defendants historically made large profits (between 8-25% per month) for themselves and the group participants from forex trading. Group participants would earn 8-25% per month on their funds with minimal risk. the defendants will exchange forex with the funds deposited by the pool participants. and upon request, pool participants could withdraw their funds within three to five business days of any such requests.
Instead of trading the pool participants’ funds as promised, the defendants misappropriated the pool participants’ funds for Nawabi’s personal benefit as well as to pay other pool participants in a manner similar to a Ponzi scheme. To conceal their abuse, the defendants created and issued false account statements that misrepresented the transaction returns that the group participants were supposed to have won. The defendants failed to return funds to group participants despite repeated requests.
The CFTC warns that orders requiring the restitution of funds to victims may not always result in the recovery of lost funds because the offenders may not have sufficient funds or assets.