Companies Accused|of Currency Violations

(CN) - A pair of U.S. businesses has conducted more than $8 million in illegal foreign currency transactions in violation of the Commodity Exchange Act, a federal agency claims in court.

The U.S. Commodity Futures Trading Commission filed the federal complaint last week against the Dinar Corporation Inc. and My Monex Inc., in Birmingham, Ala..

The July 27 action, which also named the companies' creator, Husam Tayeh, as a defendant, seeks a permanent injunction against the defendants, as well as monetary penalties and other equitable relief.

According to the complaint, the defendants have been providing retail customers who weren't eligible contract participants with transactions in off-exchange foreign currency on a "leveraged, margined or financed basis."

The transactions, which are conducted via a company website, resulted in "actual delivery of forex - if at all - within periods of not less than fifteen (15) days and as much as one hundred twenty (120) days following the date of the transaction(s)."

To further their scheme, the defendants allegedly misrepresented their credentials to current and potential customers. The Dinar Corporation, for example, purportedly represented itself to be "fully licensed and fully compliant," while failing to mention that it "has been served with cease and desist orders in the state of Texas and Illinois for operating without required licenses."

The Commission also claims the defendants failed to register with the Commission as required, or disclose to potential customers their failure to register.

From the complaint: "As of the date of the filing of this Complaint, neither DCI nor Monex NV have registered with the Commission as an RFED [retail foreign exchange dealer]," in violation of the Act.

The complaint identifies Tayeh is the president and sole shareholder of both the Dinar Corp. and My Monex (Nevada). The complaint also named Theodore Hudson II and My Monex Inc., an Alabama corporation, as relief defendants.

According to the complaint, "Hudson and Monex AL have received funds that were obtained as a result of Defendants' fraudulent conduct."

The complaint was submitted by Chief Trial Attorney Timothy Mulreany for the U.S. Commodity Futures Trading Commission.

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