Fired Stock Broker Just Can’t Do Right

     SHERMAN, Texas (CN) – Texas businessman Kevin G. White, a fired and barred stock broker, defrauded people of $5.8 million through his foreign-exchange businesses KGW Capital Management and RFF GP, the CFTC claims in court.
     The U.S. Commodity Futures Trading Commission sued White, RFF and KGW in Federal Court. It also sued relief defendants Revelation Forex Fund LP, Meridian Propane LP, and W Corporate Real Estate LP dba KGW Real Estate.
     White, of Plano or its environs, was manager/director of RFF and CEO of KGW, neither of which is registered with the CFTC.
     White and his companies “fraudulently solicited at least $5.8 million from at least 20 actual and prospective participants in a pooled investment vehicle (‘pool participant’) established by defendants for the purpose of trading in off-exchange agreements, contracts or transactions in foreign currency (‘forex’) on a leveraged or margined basis,” the CFTC says in its complaint.
     It continues: “Of the at least $5.8 million the defendants accepted for forex trading during the relevant period, defendants misappropriated approximately $1.7 million for personal and other expenses.
     “Defendants solicited prospective pool participants through two websites, and (collectively ‘websites’), written
     promotional materials, and at least one trade show presentation to invest in Revelation Forex Fund, LP (‘RFF’), a self-described hedge fund and commodity pool, where pool participants’ funds would be pooled for the purpose of trading forex.
     “In soliciting actual and prospective pool participants, defendants intentionally or
     recklessly misrepresented or omitted material facts by: (1) failing to disclose that defendants were misappropriating pool participants’ funds; (2) claiming that RFF achieved consistently profitable rates of return and a compound annual growth rate as high as 37.08% since defendants purportedly began trading on its behalf in January 2009, when in reality, RFF consistently lost money since defendants began trading in September 2011; (3) misrepresenting RFF’s performance in comparison with other forex funds; and (4) misrepresenting White’s brokerage experience and failing to disclose that White was fired from his employment as a broker in the
     securities industry and was censured and barred by the New York Stock Exchange (‘NYSE’) based on multiple customer complaints filed against him.
     “As a result of defendants’ fraudulent conduct, RFF received pool participants’
     funds to which it has no legitimate interest or entitlement. Similarly, defendants transferred some of the funds that they misappropriated to relief defendants, Meridian Propane LP (‘Meridian Propane’), and W Corporate Real Estate, LP dba KGW Real Estate (‘KGW Real Estate’), both of which are controlled by White and share a business address with defendants. Meridian Propane and KGW Real Estate have no legitimate business interest or entitlement to the misappropriated funds, which were derived from defendants’ unlawful acts.”
     The CFTC seeks disgorgement, restitution, penalties and an injunction.
     The SEC filed a parallel complaint in the same court.

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