Securities Regulation Daily Wrap Up, ENFORCEMENT—D. Or.: Oregon resident and his forex trading firm to pay $830,000 penalty for forex fraud and registration violations, (Feb 20, 2024)

By Elena Eyber, J.D.

The defendants solicited over $2.1 million from at least 21 customers to fund their fraudulent forex commodity pool operation.

The CFTC announced the resolution of an enforcement action against defendants Erik J. Hass and his company Simply Gains, Inc. involved in a forex scheme. The CFTC alleged the defendants fraudulently solicited millions of dollars from unsuspecting customers for trading retail leveraged, margined, or financed foreign currency (forex) and failed to register as required under the Commodity Exchange Act (CEA). The consent order requires the defendants to pay a $830,000 civil penalty and bars the defendants from trading futures or options on a regulated market, registering in any capacity with the CFTC, or engaging in conduct in violation of the CEA (CFTC v. Hass, February 14, 2024).

Forex scheme. The order found that the defendants solicited over $2.1 million from at least 21 customers to fund their forex commodity pool operation. Despite assurances that depositors could not lose more than 20% of the funds they deposited, the defendants lost over $1 million trading forex and misappropriated at least $415,000 more for Hass’ mortgage, credit card debt, and a Caribbean cruise. The order further found that the defendants fraudulently solicited prospective pool participants by misleading them about Hass’ experience, expertise, and investment track record while promising future profitability with limited downside. According to the order, to conceal their misappropriation and unprofitable forex trading, the defendants sent pool participants false account statements that purported to show profits.

Relief. The consent order followed a guilty plea Hass entered in a parallel criminal action where he was ordered to pay full restitution to the victims of his forex scheme. The order acknowledged that restitution obligation and required the defendants to pay an additional $830,000 civil penalty. The order further bared the defendants from trading futures or options on a regulated market, registering in any capacity with the CFTC, or engaging in conduct in violation of the CEA.

The case is No. 6:20-cv-00934-AA.

Attorneys: Douglas Snodgrass for the CFTC. Michelle Holman Kerin (Angeli Law Group LLC) for Erik J. Hass and Simply Gains, Inc.

Companies: Simply Gains, Inc.

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