The U.S. Commodity Futures Trading Commission (CFTC) filed a complaint, on April 16, in the U.S. District Court for the Middle District of Florida, charging defendants Alan Friedland of Florida and his Florida-based companies, Fintech Investment Group, Inc. (Fintech) and Compcoin LLC, with fraudulently soliciting more than $1.6 million from their customers in connection with a leveraged or margined off-exchange foreign currency (forex) scheme.
According to the complaint, starting in at least 2016 and proceeding through 2018, Friedland and his companies fraudulently solicited customers and prospective customers to purchase a digital asset known as Compcoin. The defendants falsely promised, among other things, that Compcoin would allow customers to gain access to Fintech’s proprietary forex trading algorithm known as ART, and falsely advertised that ART would deliver high rates of return.
According to the complaint, in marketing Compcoin, the defendants also falsely represented, among other things, the use and function of Compcoin and that ART “was ready for release on the open market.” In fact, as alleged in the complaint, the defendants knew that no customer could lawfully utilize ART until Fintech obtained approval from the National Futures Association (NFA), which never occurred. Thus, the purchasers of Compcoin never gained access to ART as promised, and were left with a valueless asset.
In the lawsuit, the CFTC seeks civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.