The Commodity Futures Trading Commission (CFTC) filed charges against the American Energy Exchange (Amenx) and York Commodities Monday for allegedly defrauding customers out of $1.39 million by falsely claiming to run an online energy exchange for futures and options contracts. The CFTC said no such exchange exists, the addresses and phone numbers of the purported operators are false and the companies that are listed as members of Amenx have “never heard of Amenx.”

The CFTC filed its complaint in the U.S. District Court for the Southern District of New York, seeking an injunction and other relief for penalties under the Commodity Exchange Act. The Commission said the companies fraudulently solicited and received funds by making exaggerated profit claims. “In reality, customers lost virtually all of their investment through defendants’ misappropriation of customer funds.”

According to the CFTC, Amenx made representations on its website, www.amenx.com, claiming to be a New York City-based exchange, while York through its website claimed to be a nonclearing member of the New York Mercantile Exchange. York allegedly made direct phone solicitations to customers to trade options on energy futures contracts on Amenx. Customers were led to believe York was a broker and Amenx was an exchange.

Once customers were solicited, they were advised that they had opened an online trading account on Amenx that could be accessed through the Amenx website. They were instructed to wire their funds to a bank account located in Hong Kong.

According to the CFTC, Amenx falsely claimed to be run by former independent oil and gas traders with a trading office in Chicago as well as New York. York gave customers a fax number leased from a communications company and two toll-free numbers to mislead customers into thinking it was located in the United States.

The CFTC told the court that, unless enjoined, the defendants are “likely to continue to engage in the acts and practices alleged in this complaint and similar acts and practices…” The commission is seeking a restraining order that would prevent the defendants from destroying any business records or from refusing to permit inspection of their records and business operations by the CFTC. It also is seeking disgorgement of any profits and full restitution to every one of their customers. A civil penalty against each defendant would total not more than the higher of $130,000 or triple the monetary gain to the defendant for each violation of the Commodity Exchange Act and CFTC regulations.

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