Former SNC Investment CEO Peter Son has been hauled into court by federal regulators a year after he disappeared during an NFA investigation into missing funds covered on this thread back in October of 2008:
NFA Forex Dealer Dead Pool - Page 21 - Forex Forum - FXstreet.com
The feds are now confirming that Peter Son was running an $80 million ponzi scheme:
http://www.sec.gov/litigation/compla.../comp21076.pdf
Among the SEC’s findings:
Quote:
Son used investor funds to pay the mortgage on his $2.6 million home in Blackhawk, a gated community in Danville, California, his homeowner’s association dues, and his country club dues;
Son used SNCA investor funds to pay his wife a salary of $3,000 per month even though she did no work for SNCA;
Son and Chung Transferred SNCA investor funds to SNCI to help it meet regulatory requirements that it maintain certain levels of capital; and
Son and Chung transferred SNCA investor funds to SNCI’s Korean bank account, to Son’s Korean bank account, and to the Korean bank account of a Korean company under Chung’s control.
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After covering these poorly capitalized firms for years I’m not the least bit surprised that SNC illegally used customer funds to meet their capital requirements back when they were still registered with the NFA. That’s why cap requirements had to be raised and thankfully the worst of these brokers are long gone in the U.S.
But let this be a lesson to the trading public to avoid opening an account with any poorly capitalized firm, or a firm that is not regulated and does not disclose their financials.