The Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the District of Oregon entered a consent order for permanent injunction, monetary sanctions, and equitable relief against defendants Erik J. Hass and his company Simply Gains, Inc.
The order resolves a CFTC action filed against the defendants on June 9, 2020, alleging they fraudulently solicited millions of dollars from unsuspecting customers for trading retail leveraged, margined, or financed foreign currency (forex) and failed to register as required under the Commodity Exchange Act (CEA).
The order follows a guilty plea Hass entered in a parallel criminal action where he was ordered to pay full restitution to the victims of his illegal forex scheme. The order acknowledges that restitution obligation and requires the defendants to pay an additional $830,000 civil penalty.
The order further bars the defendants from trading futures or options on a regulated market, registering in any capacity with the CFTC, or engaging in conduct in violation of the CEA as alleged in the complaint.
The Court order finds that, between March 2013 and February 2019, the defendants solicited at least $2.1 million from at least 21 individuals to fund their forex commodity pool operation. Despite assurances that depositors could not lose more than 20% of the funds they deposited, the defendants lost over $1 million trading Forex and misappropriated at least $415,000 more for Hass’ mortgage, credit card debt, and a Caribbean cruise.
The order further finds that the defendants fraudulently solicited prospective pool participants by misleading them about Hass’ experience, expertise, and investment track record while promising future profitability with limited downside. According to the order, to conceal their misappropriation and unprofitable forex trading, the defendants sent pool participants false account statements that purported to show profits.
