CFTC confirms iMarketsLive & Wealth Generators operated illegally
The CFTC has issued a press-release confirming iMarketsLive and Wealth Generators were ‘illegally offering forex and binary options to retail investors in the United States‘.
According to the CFTC, both MLM companies failed to register their respective offering, making the businesses illegal.
Both the CFTC orders against iMarketsLive and Wealth Generators were issued on September 14th.
With respect to iMarketsLive, the CFTC took issue with the company’s FX Signals Live product.
Through FX Signals Live, iMarketsLive affiliates were able to receive an automated ROI through forex trading.
The individual customers did not take any actions to make the forex trades occur and did not exercise any discretion with respect to the trades in their accounts.
Approximately 500 customers automatically mirrored trades in their forex accounts that were posted on IML’s website.
Although we approached FX Signals Live from a securities regulation standpoint, the principal behind the CFTC’s concerns are the same:
iMarketsLive affiliates were receiving automated returns from an entity run by individuals who were not registered and thus authorized provide such a service.
What’s particularly dubious on iMarketsLive’s behalf is up until now, the company had failed to inform its affiliates or the public of the CFTC investigation.
Instead iMarketsLive quietly dropped it’s FX Signals Live service earlier this year in March.
Rather than defend themselves in prove they weren’t breaking the law, iMarketsLive has settled with the CFTC.
The settlement order sees iMarketsLive agree that the CFTC’s allegation they broke the law are “taken as true and correct”.
iMarketsLive will also have to pay a $150,000 fine plus interest within ten days of the order (September 14th).
With respect to Wealth Generators, the CFTC’s order essentially mirrors that of iMarketsLive.
The CFTC investigated and found Wealth Generators was violating the Commodity Exchange Act by illegally
offering trading advice regarding retail forex transactions and binary options to some of Respondent’s paid customers who were not eligible contract participants.
BehindMLM reviewed Wealth Generators in early 2015. Analysis of the company’s business model lead us to emphasize potential regulatory violations with respect to Wealth Generators’ automated ROI services.
The CFTC took issue with the same services;
During the Relevant Period, Wealth Generators provided specific commodity trading advice to some of Wealth Generators’ customers.
Through its products FX Simplifier, FX Simplifier 2.0, and Accelerator, customers were instructed to fund accounts at a retail forex exchange dealer, which provided access to the MetaTrader 4 (“MT4”) trading platform.
On this platform, customers could link their trading accounts to an account controlled by Wealth Generators.
The customers then had the ability to set default trade allocations and have their accounts automatically mirror trades executed by the Wealth Generators account, effectively resulting in Wealth Generators trading on behalf of its customers.
Wealth Generators also offered an algorithmic trading system to its customers through its Multiplier, Multiplier 2.0, and RYZE products.
These products allowed customers to link to a third-party trading platform operated by an off-shore retail forex exchange, where customers funded accounts that were traded automatically by an algorithmic trading system.
Customers had no discretion to direct trades using these products.
During the Relevant Period, Wealth Generators acted as a CTA without registering with the Commission, in violation of Sections 2(c)(2)(C)(iii)(I) (bb) and 4m(1) of the Act and Regulation 5.3(a)(3).
As with iMarketsLive, rather than defend themselves in prove they weren’t breaking the law, Wealth Generators settled for $150,000.
I believe this is the same $150,000 CFTC fine Investview, Wealth Generators’ parent company, disclosed in its public filings back in June.
Regardless, here’s where it gets interesting.
In response to the CFTC’s press-release, Kuvera Global issued an internal “this post may not be shared” communication.
The communication acknowledged the CFTC’s press-release, settlement order and, seemingly in response to the admitted violations, draws their affiliates’ attention to the line;
Respondent has submitted the Offer in which it, without admitting or denying the findings.
Annette Raynor (right), cited as a founder of Wealth Generators, then goes on to tell the company’s “leaders”;
This is important because our decision was to settle the matter in lieu of a lengthy legal battle.
Further, understanding the areas of concern by the CFTC we have taken a number of actions to restructure our delivery of automated tools which is process.
We did not expect the CFTC to issue a press release that can be interpreted as “fraud” so in the interest of transparency and to avoid conjecture and false interpretation I wanted to provide you the facts related to the matter.
“Interpreted as fraud”…?
To be clear, there’s no need for interpretation of anything in the CFTC’s settlement order.
Here are the actual facts;
Not admitting or denying allegations is boiler-plate for pretty much every regulatory settlement agreement.
Anytime an MLM company does something wrong and is caught out, if they settle you can bet there’ll be a “we don’t admit or deny” sentence in there somewhere.
The fact of the matter though is that if Wealth Generators hadn’t broken the law, they wouldn’t have settled. Same with iMarketsLive.
Like iMarketsLive, the CFTC’s Wealth Generators settlement order stipulates the company “agrees” that the
fact and conclusions of law in this Order in this proceeding … shall be taken as true and correct.
On page 4 of the order one can find the CFTC’s conclusions of law;
IV. FINDING OF VIOLATIONS
Based upon the foregoing, the Commission finds that, during the Relevant Period, Wealth Generators violated Sections 2(c)(2)(C)(iii)(I)(bb) and 4m(1) of the Act, 7 U.S.C. §§2(c)(2)(C)(iii)(I)(bb) and 6m(1) (2012), and Regulation 5.3(a)(3), 17 C.F.R. § 5.3(a)(3) (2017).
Violating the Commodity Exchange Act and Commission Regulation is illegal, ergo Wealth Generators committed was engaged in illegal activity.
In their press-release, the CFTC states that it took action against Wealth Generators and other companies, to ‘protect (consumers) from fraud and other abusive practices.‘
You don’t need to “interpret” anything, it what it is.
Another boiler-plate stipulation commonly found in regulatory settlements is this clause;
Respondent agrees that neither it nor any of its successors and assigns, agents or employees under its authority or control shall take any action or make any public statement denying, directly or indirectly, any findings or conclusions in this Order or
creating, or tending to create, the impression that this Order is without a factual basis.
The above is taken directly from the CFTC’s Wealth Generators settlement order.
We’ll leave it up to the CFTC and you to decide whether Annette Raynor has violated the order.
For their part Investview have since abandoned their trading service offering altogether.