The United States Commodity Futures Trading Commission announced it had obtained a default judgment and permanent injunction against a North Carolina company accused of operating a $38 million forex Ponzi scheme. Bruce Kramer, now deceased, and Barki, LLC ("Barki"), were the target of a CFTC enforcement action originally filed in March 2009. According to the consent order, Barki was ordered to pay restitution of $19,960,649 and a civil monetary penalty of $20,944,707, and also received permanent registration and trading bans.
From June 2004 to February 2009, Kramer solicited customers to invest in Barki, touting his success as an experienced commodities trader and promising to trade foreign currency using a trading system he had developed. Investors were told that Barki had never had a losing month, that their investments were guarded against losses, and were safer than an investment in equities. In total, Barki raised approximately $38 million from at least 79 investors. Of this amount, nearly $18 million was used to trade commodities. But Kramer did not experience the success represented to investors. Instead, he sustained losses almost every single month that totaled over $10 million, and withdrew nearly $7 million more that was not distributed to investors. However, investors received regular interest payments representing alleged gains, and were provided fictitious monthly account statements that showed continued growth in their accounts. The scheme unraveled after Kramer died in February 2009.
The receiver appointed to oversee the distribution of assets to Barki's victims, Joseph W. Grier, III, has made two interim distributions to investors thus far totaling $3,250,369.
A link to the receiver's website is here.
A copy of the CFTC Complaint filed against Barki is here.
A copy of the consent order is here.