CFTC's Legal Win: Highrise Advantage Faces $102M Penalties

The Commodity Futures Trading Commission (CFTC), the U.S. derivatives market regulator, disclosed that Judge Carlos E. Mendoza of the U.S. District Court for the Middle District of Florida has issued a default judgment against Avinash Singh and Highrise Advantage, LLC, entailing a permanent injunction and monetary penalties.

This resolution stems from a civil enforcement action initiated by the CFTC on September 9, 2020, involving Singh, Highrise, and eight other defendants in a multi-million dollar off-exchange foreign currency (forex) scheme. On February 4, 2021, the case against Highrise Advantage was amended to incorporate new facts about the extent of the fraud and an additional fraud charge.

The judgment underscores Singh's fraudulent actions, which involved soliciting and diverting funds through Highrise and its feeder commodity pools, disregarding CFTC registration requirements, and violating regulatory norms for commodity pool operations.

This default judgment and permanent injunction bar Singh and Highrise from activities that breach the Commodity Exchange Act (CEA) and CFTC regulations. They're directed to pay $25,558,594 in restitution and $76,675,782 in civil penalties. Additionally, the order permanently prevents their CFTC registration and trading on any registered entity.

On July 5, 2023, the court finalized consent orders involving the operators of the four feeder commodity pools, fully resolving the litigation.

Regarding the case's background, the judgment reveals that Highrise and Singh accumulated nearly $58 million from investors and feeder funds, utilizing a fraction for forex trading while misappropriating a substantial sum. False statements depicting profits instead of losses were communicated to investors.

In a parallel criminal action, Singh faced indictment for wire fraud and money laundering in February 2021. Following his evasion, he was apprehended in Florida on October 19, 2023, on an outstanding warrant. The criminal case remains pending before Judge Mendoza and Magistrate Judge Robert M. Norway.

The CFTC cautions that restitution orders may not ensure recovery due to potential lack of funds by wrongdoers. The commission vows to persist in safeguarding customers and holding perpetrators accountable.

Acknowledging support, the CFTC extends gratitude to various entities, including the U.S. Attorney for the Middle District of Florida, the National Futures Association, the Cyprus Securities and Exchange Commission, the United Kingdom Financial Conduct Authority, and the Australian Securities and Investments Commission for their assistance in this matter.