Eddy Alexandre, owner and operator of EminiFX, has failed to secure dismissal of the CFTC case against him and his firm.
The relevant order was signed by Judge Valerie E. Caproni of the New York Southern District Court on July 10, 2024.
This case arises out of Eddy Alexandre’s expansive fraud against investors in EminiFX, Inc., an entity owned and operated by Mr. Alexandre that purported to trade in Forex and cryptocurrency.
In criminal proceedings brought against Mr. Alexandre, he pleaded guilty to the same fraudulent conduct alleged by Plaintiff Commodity Futures Trading Commission (CFTC). Mr. Alexandre, proceeding pro se, moved to dismiss the CFTC’s complaint, compel arbitration, or stay the case. The CFTC opposed the motion.
Eddy Alexandre owned and operated EminiFX between September 2021 and May 2022. Although Mr. Alexandre guaranteed investors that they would receive a return of at least 5% per week, he lost nearly 70% of the funds he traded.
None of the funds that were traded was used for trading forex or cryptocurrency, however, despite his representations to the contrary. The funds that were not traded were retained and frittered away by Defendants, including on extravagant purchases such as BMW and Mercedes Benz automobiles and luxury apparel.
Of the approximately $59 million that was obtained from investors, Mr. Alexandre funnelled at least $14.7 million directly into his personal account.
Instead of revealing all of this to his investors, however, Mr. Alexandre falsely increased the account balances reported to investors by approximately 5% to 10% every Friday so that the accounts appeared to be growing by reflecting balances that were not accurate. In short, Mr. Alexandre ran a Ponzi scheme to disastrous results.
The CFTC initiated this case on May 11, 2022, alleging various violations of the Commodity Exchange Act (CEA). The CFTC alleged that the Defendants engaged in fraud with respect to the sale of commodities futures and forex trades, that Defendants used manipulative devices in furtherance of the fraud, that EminiFX failed to register as a commodity pool operator (CPO), and that Alexandre failed to register as an associated person (AP) of a CPO.
The following day, Mr. Alexandre was arrested.
On April 4, 2024, Mr. Alexandre moved to dismiss the complaint, to compel arbitration, and to stay the case, and the CFTC opposed the motion on April 22, 2024.
Mr. Alexandre moves to dismiss the Complaint for lack of subject matter jurisdiction, failure to state a claim, and for gross abuse of power and bad faith. The Court found that none of these arguments is grounds to dismiss the complaint.
For instance, the Court noted that there is no trend towards ordering arbitration in the absence of an agreement to arbitrate; because there is no written, enforceable arbitration agreement in this case, there is no ground to compel arbitration.
Because Mr. Alexandre presents no valid grounds on which the Court may stay the case, his motion to stay the proceedings was denied.
