The U.S. derivatives regulator Commodity Futures Trading Commission (CFTC) announced that the Honorable Darrin P. Gayles of the U.S. District Court for the Southern District of Florida issued a default judgment order against four individuals and five companies (nine defendants): Jase Davis of Brandon, Mississippi; Borys Konovalenko of Ukraine; Anna Shymko of Duluth, Georgia; Alla Skala of Grand Island, New York and/or Fort Erie, Canada. Easy Com LLC d/b/a ROFX, a New Hampshire LLC. Global E-Advantages LLC a/k/a Kickmagic LLC d/b/a ROFX, a Delaware LLC and New York foreign LLC. Grovee LLC d/b/a ROFX, a Delaware LLC; Notus LLC d/b/a ROFX, a dissolved Colorado LLC. and Shopostar LLC d/b/a ROFX, a Colorado LLC.
The default judgment stems from the CFTC’s August 31, 2022 amended complaint charging the nine defendants and defendant Timothy F. Stubbs with fraud, embezzlement and registration violations in connection with a fraudulent foreign exchange (forex) scheme.
The default judgment against ROFX, issued on April 22, finds the nine defendants liable for all violations of the Commodity Exchange Act (CEA) and CFTC regulations alleged in the amended complaint, including forex trading fraud that led to in the misappropriation of over $57 million in client funds. Under the terms of the default judgment, the nine defendants are ordered to pay jointly and severally more than $56 million in restitution to defrauded customers and $169,086,837 in civil monetary penalties. The default judgment also permanently enjoins them from engaging in conduct that violates the CEA, as charged, and permanently bars them from registering with the CFTC and trading in any CFTC-regulated markets.
On May 8, the court also entered a supplemental consent order against the remaining defendant, Timothy F. Stubbs, a CPA and resident of Atlanta, Georgia. The supplemental consent order requires Stubbs to pay a civil monetary penalty of $314,000 and restitution of $153,000. Previously, on December 19, 2023, the court issued an initial consent order for a permanent injunction against Stubbs. The original consent order finds that Stubbs engaged in fraud and participated in the joint venture through the control and operation of Grovee LLC, including accepting and misappropriating client funds intended for foreign exchange transactions. The initial consent order imposes a permanent injunction and permanent trading, solicitation and registration bans against Stubbs.
The default judgment against the nine defendants and the supplemental consent order against Stubbs resolve the CFTC’s action against all defendants.
ROFX case background
The default judgment against the nine defendants and the original consent order against Stubbs find from January 2018 to September 2021, the five companies, acting as a joint venture under the control of the five individual defendants, used the ROFX.net website to solicit and fraudulently embezzle at least $57.5 million from US and international customers for purported forex trading. The defendants obtained customers through ROFX’s website, where ROFX falsely claimed to trade forex using a highly successful automated trading robot with guaranteed loss coverage. The default judgment and consent order also find that the defendants misappropriated all client funds they received into the defendant companies’ bank accounts by wiring the funds to offshore entities unrelated to forex trading and to the individual defendants’ personal accounts.
In addition to their misrepresentations and misrepresentations, the default judgment and consent order find that the five companies acted as futures traders by doing business as ROFX, soliciting or accepting orders for retail forex trades through the ROFX website, and accepting funds at or on in connection with such transactions without being registered with the CFTC.