CFTC fraud case results in record penalty

The head of a failed South African firm that orchestrated a global forex scam has been hit with a record-setting penalty in a U.S. Commodity Futures Trading Commission (CFTC) case.

A U.S. federal court judge ordered Cornelius Johannes Steynberg, the founder and CEO of Mirror Trading International Proprietary Ltd., to pay US$3.4 billion in a fraud case — including US$1.7 billion in restitution to defrauded investors and a US$1.7 billion penalty. Steynberg was also permanently banned.

The court’s order found Steynberg liable for fraud in connection with a global multi-level marketing scheme that solicited Bitcoin from retail investors to participate in an unregistered commodity pool that the firm operated.

“MTI and Stynberg controlled the commodity pool and purportedly traded off-exchange, retail forex through what they falsely claimed was a proprietary “bot” or software program,” the CFTC said, noting that the scheme took in over US$1.7 billion between 2018 and 2021, which was all misappropriated.

The CFTC said that Steynberg, who is currently a fugitive from South African law enforcement, has been detained in Brazil on an INTERPOL arrest warrant since December 2021.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.