US Court rules against Highrise Advantage and its founder in a forex scheme case

The US commodities regulator, the Commodity Futures Trading Commission (CFTC), recently announced that Judge Carlos E. Mendoza of the US District Court for the Middle District of Florida had ruled against Highrise Advantage, LLC, and its founder, Avinash Singh.

According to the regulator, the judge has issued a default judgment against the firm and its executive, which grants a permanent injunction, in addition to imposing monetary sanctions regarding the multi-million dollar off-exchange forex scheme.

Singh and Highrise to pay over $100 million in penalties

The ruling comes more than three years after the CFTC initiated the civil enforcement action back in early September of 2020. The regulator targeted Avinash Singh, his company, Highrise Advantage, as well as eight other defendants. Now, the court order finally concluded the years-long case, finding Singh guilty of engaging in fraudulent solicitation and misappropriation of funds.

The court case revealed that Singh used the master commodity pool, Highrise, but also four feeder commodity pools. Not only that, but both he and his company did not register with the CFTC, as is required for such a company. By failing to register, Singh and Highrise violated the standing regulator requirements once they started operation of commodity pools.

With the default judgment and permanent injunction ruling, Singh and Highrise will be permanently prohibited from engaging in any sort of conduct that violates the CFTC regulations or the Commodity Exchange Act. In addition to that, they will have to pay massive fines. Both are ordered to pay a total of $25,58,594 in restitution plus another $76,675,782 in civil monetary penalties.

Also, neither Singh nor Highrise are allowed to register with the CFTC in the future or participate in trading on any registered entity in the country.

How did the scheme work?

According to recent reports, the court order also revealed that both Highrise and Singh collected almost $58 million from feeder funds and various investors. However, less than $2.5 million was used for actual FX trading. Meanwhile, more than $25 million — nearly half of the mentioned amount — was misappropriated.

The funds provided by the firm’s investors were used for personal expenses and Ponzi-type payments. The company also provided false statements to investors, which suggested that it had made major profits and no losses, misleading them and hiding the true uses of the provided money.

The court also entered consent orders against the operators of four feeder community pools on July 5 of this year. The feeder pools in question included Green Knight Investments, LLC, SR&B Investment Enterprises, Inc., King Ryalty, LLC, and Bull Run Advantage, LLC.