In a win for accountability in the forex industry, Erik J. Hass and his company Simply Gains have been ordered to pay restitution and penalties for defrauding investors. According to a consent order by the U.S. District Court of Oregon, the defendants solicited over $2.1 million from 21 individuals on false pretenses between 2016-2018.
Simply Gains promised investors could not lose more than 20% of deposited funds through forex trading. However, court documents reveal Hass lost over $1 million from forex trading alone. An additional $415,000 was misappropriated for personal expenses such as Hass’ mortgage, credit card debt and a Caribbean vacation.
This blatant disregard for clients’ finances was uncovered as the CFTC investigated the pair for operating an unregistered forex pool in violation of commodity trading laws. Hass has separately pled guilty to related criminal charges and accepted full restitution responsibilities.
As part of the civil settlement, Hass and Simply Gains did not refute the CFTC’s allegations. The court ordered $830,000 in penalties to be paid collectively. They are also prohibited from engaging in commodity futures or options markets, as well as activities contravening CFTC statutes going forward.
The judgment sends a clear message that dishonest practices will not be tolerated says CFTC Director of Enforcement James McDonald. In recent months, the regulator obtained sizeable remedies against other serial fraudsters like Michael DaCorta and Avinash Singh. DaCorta was found to have bilked $80 million from 800 victims through Oasis International Group. Singh amassed $58 million from investors for his Highrise Advantage scheme.
With retail forex attracting increasing public interest, such prosecutions are necessary to safeguard consumers. The sanctions handed to Hass, though unable to fully compensate harmed investors, emphasize culpability and serve as a warning. As the CFTC continues efforts to stamp out misconduct, stringent actions would go farther in protecting market integrity.
