By: Aaron Kim, Insider Threat Analyst
The CEO of EminiFX, a cryptocurrency and forex trading platform has been charged with commodities fraud and wire fraud offenses. Eddy Alexandre allegedly solicited more than $59 million in investments from hundreds of individual investors after making false representations in connection with the trading platform.
“Eddy Alexandre allegedly induced his clients to invest over $59 million with promises of huge passive income returns via his own proprietary trading platform called EminiFx. In reality, no such technology existed, as Alexandre is alleged to have invested very little of their money – most of which he lost – and transferred most of it to his own personal accounts to pay for luxury items for himself. As in any of the financial markets, the foreign exchanges offer high return potential, but investors should beware of the downside risks of false claims and get rich quick schemes that oftentimes are too good to be true”, U.S Attorney Damian Williams stated.
Alexandre falsely guaranteed to investors that they would double their money within five months of investing by earning 5% weekly returns on their investment using a “Robo-Advisor Assisted account” to conduct trading. Authorities said that Alexandre referred to his tech as his “trade secret,” refusing to tell investors what it was, and alter falsely representing to investigators that they had earned their percentage on the investment, which could then be withdrawn or re-invested.
However, Williams explained that the company did not earn 5% weekly returns for their investors, which Alexandre was allegedly aware of and most of the money was never even invested. Instead of the money being invested, Alexandre lost more than $6 million in the funds he invested, which was never disclosed. Additionally, Alexandre directed at least $14.7 million to his personal bank account to fulfil a luxury lifestyle. Specifically, he used $155,000 in investor money to purchase a BMW for himself and spent another $13,000 on car payments that included a Mercedes Benz vehicle.
Alexandre was charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison and one count of wire fraud, which carries a maximum sentence of 20 years in prison.
Contact ITMG to Develop Strategies and Protocols Designed to Help Your Company Mitigate Your Insider Risk
ITMG is an industry leader in helping organizations throughout the United States strengthen their insider risk management programs and secure sensitive data and intellectual property. Our team of bona fide experts has the real-world experience necessary to plan out and create holistic security solutions tailored to the needs and risks in your industry. Contact ITMG today to learn more about how we can help! You can also visit our Facebook, Twitter, and LinkedIn pages for more updates and insights into the world of insider risk management.