$100 million fine set in futures fraud case

By Ann Saphir
International Financial Services LLC and International Financial Services Inc., of New York, were ordered to pay $100 million for defrauding currency futures investors, the Commodity Futures Trading Commission said.
John Walker Robinson, former IFS president, and Chan Kow Lai, an IFS director, were also “personally liable for the wrongdoing,” Judge Gerard Lynch of the Southern District of New York said in an order of final judgment, posted on the CFTC Web site. The commission originally filed a complaint in July 2002.

The commission began cracking down on currency fraud in 2000, after Congress gave it authority over such cases. The $100 million penalty is among the 10 biggest judgments ever ordered in a foreign exchange case, according to commission lawyer Stephen Obie.
IFS had argued that it was brokering currencies in the so- called spot market, and that the commission, which regulates futures markets, had no jurisdiction over it. The court determined the contracts IFS dealt in were in fact illegal futures contracts, setting a precedent that will help the commission as it pursues other fraud cases, Obie said.
Source: South Florida Sun-Sentinel

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