US CFTC Charges 4 Companies with $1 Million Forex Fraud

The Commodity Futures Trading Commission (CFTC​) on Friday said that it has filed a civil enforcement action in the U.S. District Court for the Western District of North Carolina, accusing Storm Bryant and Elijah Bryant, III, a Californian firm, and CapitalStorm, LLC, GenerationBlack, LLC and NCome, LLC of North Carolina, with fraudulent solicitation, misappropriation and registration violations relating to a $1.05 million fraudulent scheme operated by the Bryants through their corporate entities.

From approximately March 2018 through the present, the CFTC charges that Storm Bryant and Elijah Bryant III, individually and through CapitalStorm LLC, Generationblack LLC, and Ncome LLC, has fraudulently solicited, and continues to fraudulently solicit existing and prospective clients who are not eligible contract participants (ECPs) to engage in retail transactions in off-exchange forex on a leveraged, margined, or financed basis.

According to the US regulator, the defendants received approximately $1.05 million from approximately 94 clients during the relevant period, all of which the defendants misappropriated. Approximately $50,870 was sent back to clients as purported forex trading “profits” in the nature of a Ponzi scheme.

The commodities watchdog pointed out that Capital Storm, Generation Black, and Ncome, haven’t registered with the CFTC as commodity trading advisors (CTA), and Storm and Elijah Bryant hasn’t registered as associated persons of a CTA. However, the companies solicited and continue to solicit clients or prospective clients through in-person solicitations as well as social media platforms such as Facebook and Instagram, including a website operated by Storm and Elijah Bryant, to induce non-ECP, retail clients to send the defendants funds. 

The CFTC also detailed in the complaint that Storm and Elijah Bryant, both individually and as agents of Capital Storm, Generation Black, and/or Ncome, describes themselves as highly successful forex traders who generate tremendous returns for their clients. When the Bryants successfully induced non-ECP, retail clients to send them funds, the Bryants misappropriated the funds by receiving them or moving them into accounts held by Storm and/or Elijah Bryant in their own names and using the funds to purchase jewelry, rent homes, European travel, and fund the Bryants’ personal trading accounts.

On September 24, 2021, the court issued an ex parte order freezing assets controlled by the defendants and preserving records. A hearing on the CFTC’s Motion for Preliminary Injunction has been conducted on October 8, 2021.

In its continuing litigation, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act (CEA) and CFTC Regulations.