Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—CFTC finds no unlawful liquidation of forex account, (Jun 12, 2026)
Organizations Mentioned:BASE Company | Interactive Brokers, LLC | Office of the General Counsel
By R. Jason Howard, J.D.
Nothing excused the Complainant from filing his claims more than two years after the latest possible deadline.
A CFTC Administrative Law Judge (ALJ) has dismissed a complaint brought against Interactive Brokers, LLC, alleging fraud in its valuations and unlawful liquidation of an individual’s forex account after finding that the claims were time barred by the two-year statute of limitations (Zhou v. Interactive Brokers, LLC, CFTC Docket No. 25-R022 (June 10, 2026)).
Proceedings. The Complainant filed his complaint on May 1, 2025, but failed to perfect his complaint with a bond so it was not deemed filed until September 11, 2025. For purposes of the ALJ initial decision, however, the ALJ construed his complaint filing date as May 1, 2025. The Complainant then filed four amended complaints with the ALJ treating the Fifth Amended Complaint as the operative complaint.
The Fifth Amended Complaint focused on alleged misconduct between 2017 and 2020 which the ALJ construed liberally due to the Complainant’s self-representation. The ALJ’s initial decision includes excerpts from the pleadings and the ALJ stated that, taken together, the allegations appear to be “complaining about the fact that the valuations and calculations were done in the Complainant’s base currency, the U.S. dollar, and about the accounting methods used to value his trades generally.” He also alleged that Interactive Brokers engaged in unauthorized trading with respect to his account.
Interactive Brokers asserted that, among other things, the Complainant’s claims were barred by the two-year statute of limitations.
Findings. The ALJ explained that the Complainant alleged misconduct between July 3, 2017, and August 31, 2020, and noted that during the period of the alleged misconduct: the Complainant had access to his monthly financial statements; he gave his wife access to log in to the account and she made trades in the account; Interactive Brokers sent him numerous liquidation notices by email due to margin deficiencies; and he made several deposits and withdrawals of cash. He allegedly discovered the fraud “in July 2024 from the inconsistencies in Fx-position, cash, ticket in the statement and the total cash in the website online account.”
The ALJ then explained that complaints for misconduct under the Commodity Exchange Act (CEA) or its regulations must be filed within two years after the cause of action accrues. In cases alleging fraud, “a cause of action ‘accrues’ when a complainant knows, or should have known, in the exercise of due diligence, that wrongful conduct has occurred resulting in monetary damages.” Importantly, “the determination of when the cause of action accrues turns on when a customer discovers those facts enabling him to detect a general fraudulent scheme, rather than when the customer grasps the full details of the scheme or determines the available legal remedies.”
The Complainant argued that his claims accrued in July 2024 when he discovered the alleged wrongdoing but, the ALJ noted that all of the information—his forex positions, trade tickets, and total cash—was available to him in the 2017 through 2020 time period, when the alleged misconduct occurred. The ALJ also noted that the information was available through a variety of sources, all of which were accessible to the Complainant.
The ALJ determined that the alleged wrongdoing was discoverable “arguably as early as 2017, and at the latest by 2021 when he questioned his wife about the account losses, making his statutory deadline the period between 2019 and 2023.”
Nothing excused the Complainant from filing his claims more than two years after the latest possible deadline, the ALJ ruled.
Conclusion. The ALJ determined that the claims were not filed within the two-year statute of limitations and dismissed the complaint with prejudice. No costs or attorney fees were awarded to either party.
CFTC Docket No. 25-R022.
Judge: Puri, K.
Attorneys: Gang Zhou, pro se. Mark G. Materna, Office of the General Counsel, for Interactive Brokers, LLC.
Companies: Interactive Brokers, LLC
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