Hedge Fund Focus

$85 Million Forex Ponzi Scheme

The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed an action in federal court in San Francisco charging SNC Asset Management, Inc., (SNC Asset) and SNC Investments, Inc., (SNC Investments), both of Pleasanton, California (collectively SNC), and Chief Executive Officer Peter Son and Chief Financial Officer Jin K. Chung, with operating an $85 million fraudulent foreign currency (forex) scam involving approximately 500 customers. The court entered an emergency restraining order freezing assets and preserving the records of the defendants and scheduled a hearing on June 22 on the CFTC’s motion for a preliminary injunction

The CFTC’s complaint, filed today, charges defendants with misappropriating customer funds to pay off other customers and to pay personal and business expenses. The defendants are also charged with fraudulent solicitation and the issuance of false statements to customers to conceal their misappropriation and lack of trading. As alleged, defendants abruptly closed operations, and Son and Chung disappeared.

The Securities and Exchange Commission (SEC) also filed a complaint against the above-named defendants for conducting an $80 million Ponzi scheme that targeted Korean-American investors with false promises of extraordinarily high returns from foreign currency (forex) trading.

To view the CFTC press release on this matter, please visit:

http://cftc.gov/newsroom/enforcementpressreleases/2009/pr5666-09.html

To view the SEC press release on this matter, please visit:

http://sec.gov/news/press/2009/2009-131.htm