Washington, D.C. – The Commodity Futures Trading Commission today announced that a consent order was entered in the Western District of Texas in an enforcement action against defendants Abner Alejandro Tinocoand his company, Kikit & Mess Investments, LLC, a self-styled investment firm, finding that they misappropriated in excess of $7.2 million from investors who intended to trade forex or cryptocurrency in managed accounts. The order imposes injunctive relief, including bans relating to trading and registration.
In addition to finding the defendants liable for fraud, the order enjoins the defendants from future violations of the Commodity Exchange Act (CEA). The order also permanently bans the defendants from trading or registering with the CFTC and reserves determination of the amounts of restitution, disgorgement, and civil monetary penalty for future decision by the court.
On March 25, 2022, US District Court Judge David C. Guaderrama signed a Consent Order of Permanent Injunction making liability findings. The order finds that, commencing in September 2020, the defendants fraudulently solicited at least $7.2 million from at least 322 clients, promising to use the funds to trade foreign exchange and cryptocurrency in individual managed accounts. The order finds that the defendants did not trade their clients’ funds as represented, and instead used them to pay for Tinoco’s personal expenses, such as the travel costs for chartering a private jet, the purchase of a luxury mansion and other real estate, and the purchase or lease of luxury automobiles. Some of the funds were also used to pay bogus “investment profits” to clients in a manner akin to a Ponzi scheme.
The Division of Enforcement staff members responsible for this case are Susan B. Padove, Heather J. Dasso, Matthew Edelstein, David A. Terrell, Scott Williamson, and Robert T. Howell.
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CFTC’s Forex Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories and Articles that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisorywhich alerts customers to forex fraud and lists simple ways to spot forex scams.
The CFTC also strongly urges the public to verify a company’s or individual’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company or individual. A company’s or individual’s registration status can be found using NFA BASIC.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.