The Commodity Futures Trading Commission (CFTC), the U.S. regulator of derivatives markets, announced that Judge Darrin P. Gayles of the U.S. District Court for the Southern District of Florida issued default judgment orders against four individuals and five companies (nine defendants): Jase Davis of Brandon, Mississippi, Borys Konovalenko of Ukraine, Anna Shymko of Georgia Anna Shymko of Duluth; Alla Skala of Grand Island, NY and/or Fort Erie, Canada; Easy Com LLC d/b/a ROFX of New Hampshire; Global E-Advantages LLC a/k/a Kickmagic LLC d/b/a ROFX, a Delaware LLC and New York Foreign LLC; Grovee LLC d/b/a ROFX, a Delaware LLC; Notus LLC d/b/a ROFX, a dissolved Colorado LLC; and Shopostar LLC d/b/a ROFX, a Colorado LLC.

The default judgment order stems from an amended complaint filed by the CFTC on August 31, 2022, alleging fraud, misappropriation, and registration violations in connection with a fraudulent foreign exchange (forex) trading scheme against nine defendants and respondent Timothy F. Stubbs.

The default judgment order against ROFX, issued on April 22, holds the nine defendants liable for all violations of the Commodity Exchange Act (CEA) and CFTC regulations alleged in the amended complaint, including fraudulent conduct involving forex trading that resulted in the misappropriation of more than $57 million in customer funds. Under the terms of the default judgment order, the nine defendants are required to pay, jointly and severally, more than $56 million in restitution and $16,908,687 in civil penalties to defrauded customers. The default judgment order also permanently enjoins them from engaging in violations of the U.S. Securities Exchange Act and permanently prohibits them from registering with the CFTC and trading in any CFTC-regulated market.

On May 8, the Court also issued a supplemental consent order against the remaining defendant, Timothy F. Stubbs, a certified public accountant residing in Atlanta, Georgia. The supplemental consent order requires Stubbs to pay $314,000 in civil penalties and $153,000 in restitution. Previously, on December 19, 2023, the Court issued an Initial Consent Order for Permanent Injunction against Stubbs. The Initial Consent Order found that Stubbs, through his control and operation of Grovee LLC, engaged in fraudulent and concerted criminal activity, including accepting and misappropriating customer funds for use in foreign exchange transactions. The Initial Consent Order imposed a permanent injunction against Stubbs, as well as permanent trading, solicitation, and registration bars.

A default judgment order against nine defendants and a supplemental consent order against Stubbs resolved the CFTC's action against all defendants.

Background of the ROFX Case

Both the Default Judgment Order against nine defendants and the Preliminary Consent Order against Stubbs found that from January 2018 through September 2021, the five companies, acting as a common enterprise under the control of the five individual defendants, fraudulently solicited and misappropriated at least $57.5 million from U.S. and international customers for purported foreign exchange transactions using the ROFX.net website. The Defendants obtained customers through the ROFX website, in which ROFX falsely claimed to trade forex utilizing highly successful automated trading robots and guaranteed to cover losses. The Default and Consent Orders also found that Defendants misappropriated all of their customers' funds deposited into Defendants' corporate bank accounts by wiring the funds to offshore entities unrelated to forex trading and to Defendants' personal accounts.

In addition to the misrepresentations and misappropriation of funds, the Default and Consent Orders found that the five firms acted as futures commission merchants, doing business as ROFX, soliciting or accepting retail foreign exchange trading orders through the ROFX website, and accepting funds for or in connection with such trading without registering with the CFTC.