Federal Court Permanently Enjoins NC Forex Fraudsters, Orders $5.3M Restitution and Penalties

Release Number 9016-24

Federal Court Orders North Carolina Companies and Their Owners to Pay Over $5.3 Million for Forex Fraud

December 11, 2024

WASHINGTON, D.C. — The Commodity Futures Trading Commission today announced the U.S. District Court for the Western District of North Carolina issued an order for summary judgment and a permanent injunction against Storm Bryant and Elijah Bryant III, formerly of Raleigh, North Carolina and Los Angeles, and CapitalStorm LLC, GenerationBlack LLC, and Ncome LLC, all North Carolina limited liability companies, on charges the defendants operated a fraudulent foreign currency scheme, misappropriated over $1.9 million in client funds and committed related registration violations.

The court’s order permanently bans Storm Bryant, Elijah Bryant, and their three related companies from trading in any CFTC-regulated markets and registering with the CFTC. It also requires them to pay, jointly and severally, $1.3 million in restitution to their victims and a $3.9 million civil monetary penalty in connection with a fraudulent forex scheme.

The order finds from March 2018 to September 2021, the three LLCs acted as commodity trading advisors without being registered with the CFTC, mishandled client funds and failed to keep and maintain books and records as required by CTAs; and Storm and Elijah Bryant acted as associated persons of a CTA without being registered with the CFTC as required.

The court’s order resolves the CFTC’s enforcement action against Storm Bryant, Elijah Bryant, Capital Storm LLC, Generation Black LLC, and Ncome LLC.  [See CFTC Press Release 8446-21 ]

Case Background

The order stems from a CFTC complaint filed Sept.15, 2021, and finds during the relevant period, the Bryants, individually and through their three LLCs, solicited clients who were not eligible contract participants, to engage in retail transactions in off-exchange forex on a leveraged, margined, or financed basis. The defendants received over $1.9 million from 233 clients, all of which they misappropriated. The defendants sent nearly $664,000 back to clients as withdrawals of principal or purported forex trading “profits” in the manner of a Ponzi scheme.

The order finds the defendants made material misrepresentations and omissions to induce clients into depositing money, including statements regarding how clients’ funds would be used to open trading accounts; defendants’ success, performance, and generous returns; and defendants’ ability to lawfully trade for anyone. They also failed to disclose they never opened accounts for their clients; they did not conduct trading for clients; the trading accounts clients viewed were demos; and neither the corporate defendants nor the Bryants were registered with the CFTC. They misappropriated the funds they received in the scheme by depositing the money into personal accounts to support their lavish lifestyle.

The order also finds the Bryants controlled all three LLCs and knowingly induced the underlying violations or failed to act in good faith and are therefore liable for the violations as controlling persons. The court’s order lifts a previous 2021 injunction to freeze the defendants’ assets, for the limited purpose of transferring such assets up to the amount owed to satisfy the defendants’ restitution and civil monetary penalty obligations.

The CFTC cautions victims that an order of repayment may not result in the recovery of any money because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Western District of North Carolina and the North Carolina Office of the Secretary of State, Securities Division.

Division of Enforcement staff responsible for this case are Timothy J. Mulreany, George H. Malas, Kassra Goudarzi, Paul G. Hayeck, and former staff member Hillary Van Tassel.

CFTC’s Forex Fraud Advisory

The CFTC has issued several customer protection fraud advisories and articles that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which alerts customers to forex fraud and lists simple ways to spot forex scams.

The CFTC also urges the public to verify an individual or company’s registration at NFA BASIC before investing funds. Customers should be wary of providing funds to any unregistered entity.

Suspicious activities or information, such as possible violations of commodity trading laws, should be reported to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected, paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.

-CFTC-

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