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Abstract:SEC charges Jonathan Webb for defrauding investors, including low-income cemetery workers, in a $1.7M Forex scam. The settlement includes $400K in penalties.
The Securities and Exchange Commission (SEC) has accused Jonathan Webb of Massachusetts of defrauding investors, especially low-income cemetery workers, through a fraudulent securities scam. Webb has agreed to settle the matter, avoiding roughly $400,000 in fines.
Forex Fraud Scheme Against Cemetery Workers
According to the SEC's complaint, Webb solicited $1.7 million from at least 34 persons for investment purposes between January 2021 and August 2023. Many of these investors were cemetery staff and church members who put their confidence in Webb and expected big rewards.
Webb, who had been an arborist at a Massachusetts cemetery since 1994 and was promoted to tree maintenance supervisor in 2019, lacked formal investing training. His sole financial knowledge was maintaining a company retirement account and trading stocks in a personal trading account.
Webb took a two-week online trading course in 2019, where she learned about Forex trading. The second week was all on leveraging Forex markets. After finishing the training, he traded with his own money, experiencing both profits and losses. He then learned that some international brokerage firms permitted Forex trading with leverage of up to 500:1, considerably increasing possible earnings but also raising hazards.
Unverified Trading Software & Misleading Promises
Webb became particularly intrigued by “Barclays Expert Advisor,” an automated trading software that claimed to deliver constant 15% monthly profits with little losses. However, he was only allowed to do due diligence using publicly available information and the program website. The software has no ties to Barclays Bank or Barclays plc.
Webb shared his passion for Forex trading with cemetery personnel and members of his church, where he was president and board member. He promised high profits and urged others to join with him, promising that they would collect their initial investment plus interest within a year.
Exploiting Trust and Encouraging Risky Loans
Starting in January 2021, Webb vigorously sought donations from workers, acquaintances, and church members, many of whom he had known for decades. Several investors were low-wage individuals who met with Webb at the cemetery. Individuals gave tens of thousands of dollars, with some taking out personal loans of up to $50,000 on Webb's advice. In other situations, he even offered to pay their loan installments.
Between January 2021 and August 2023, at least 34 people contributed nearly $1.7 million. Many of these transactions were made in cash, and Webb failed to keep a record of investor identities, investment amounts, or returns paid. Furthermore, he did not keep track of how much of the funds were actually invested in forex markets.
Investors Lose Millions in Forex Trading
By August 2023, the majority of investor cash had been lost as a result of unsuccessful forex trading. According to the SEC complaint, Webb reportedly stole some cash for personal needs and utilized new investor monies to reimburse previous investors in a Ponzi-like scheme.
The SEC's action, filed in the United States District Court for the District of Massachusetts, accuses Webb of breaching antifraud requirements under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, as well as Rule 10b5.
SEC Settlement & Legal Consequences
Webb has consented to a permanent injunction prohibiting additional infractions without admitting or rejecting the claims. In addition, he will pay a disgorgement of $250,753, prejudgment interest of $29,391, and a civil penalty of $118.225. The settlement must be approved by the court.
This case serves as a warning about the hazards of unregulated Forex trading schemes, as well as the significance of doing comprehensive research before investing. The SEC continues to work to safeguard investors and bring dishonest people responsible.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
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