Defendants Morgan Hunt and Kim Hecroft were ordered to pay almost $400,000 in civil monetary penalties and restitution in connection with the lawsuit. A US District Court found that Hunt, operating as Diamonds Trading Investment House, and Hecroft, operating as First Options Trading, ran a fraudulent program to solicit Bitcoin from citizens to invest in trading products including leveraged or margined foreign currency contracts, binary options, and diamonds. The defendants used Facebook and email to get Bitcoin from citizens, falsely claiming that they would use the funds to invest in trading for the benefit of their customers. As traders, they misrepresented their portfolio management experience, and falsely told customers they were not allowed to withdraw their purported investment profits without first paying a tax to the CFTC. They also misappropriated customer funds. Hunt’s and Hecroft’s actions included providing fake account statements, impersonating a CFTC investigator, and sending forged documents purportedly authored by the CFTC’s General Counsel and bearing an image of the CFTC’s official seal. Hunt and Hercroft will each have to pay restitution and a $180,000 civil monetary penalty. They have also received a permanent trading and registration ban.
