Recently the SEC announced an emergency asset freeze against an unregistered money manager and his companies in Plano, Texas, who are charged with defrauding investors in a foreign currency exchange (forex) trading scheme.
The SEC is suing Kevin G. White for having allegedly raised more than $7.1 million from investors by falsely claiming his low-risk forex trading strategy yielded returns of more than 393 percent since its creation in January 2009. While White touted this track record for the fund that began in January 2009, no investor funds for forex trading were actually received until September 2011.
White also advertised that he had a successful “25-year Wall Street career.” In reality, the forex trading has incurred losses of investor funds, and White actually spent only six years as a licensed securities professional in Houston.
White operated this fraud through two primary entities that he owns and controls: KGW Capital Management and Revelation Forex Fund. KGW Capital purports to be “one of the world’s leading private investment firms.”
“White and his companies brandished phony credentials and a can’t-miss trading strategy to lure investors into a web of deceit,” said David Woodcock, Director of the SEC’s Fort Worth Regional Office. “In reality, White was suffering forex trading losses and putting investor money to other uses.”
According to the SEC complaint, White also siphoned away over $1.7 million of investors’ money to pay personal expenses, finance expensive trips, and fund other unrelated and undisclosed businesses and investments.
Since receiving its initial investments in September 2011, the fund has incurred realized trading losses of more than $550,000 plus approximately $1,419,600 in unrealized losses through May 31, 2013.
The CFTC filed a parallel action against White and his companies.
The court has granted the requests of the SEC and CFTC for an asset freeze and temporary restraining order against White, KGW Capital, Revelation Forex, and RFF GP LLC, which is the general partner of Revelation Forex.
Both regulatory agencies are seeking disgorgement of ill-gotten gains with prejudgment interest and financial penalties as well as preliminary and permanent injunctions.