(CN) – A Texas A&M finance professor and a Houston-based lawyer and CPA defrauded investors of more than $19 million by using forged bank records to make it appear that they were earning huge returns in foreign exchange trading, the SEC claims in Houston Federal Court.
The SEC claims that Texas A&M finance professor Robert D. Watson and Houston attorney and CPA Daniel J. Petroski used “Alpha One,” a foreign-currency trading software program purportedly owned by their firm PrivateFX Global One Ltd., and 36 Holdings Ltd., a so-called “deal clearing company” owned and controlled by Watson, to persuade investors that they had millions in U.S. and Swiss accounts.
The men allegedly claimed that their trading business made annual profits of more than 23 percent and had never had a losing month.
Those claims are not supported by valid financial records, the SEC says.
The men are accused of creating phony records showing that 36 Holdings held an account at Deutsche Bank that earned more than $2 million for Global One this year by trading foreign currencies. No such account existed, the SEC says.
The SEC also claims the men provided it with phony statements from a Swiss bank and falsely claimed that 36 Holdings had almost $70 million on deposit there, including $11 million from Global One.
The SEC has obtained an emergency order freezing the defendants’ assets. It seeks disgorgement and penalties.