Judgments entered against Canadian in Ponzi scheme
CONCORD, N.H. (Legal Newsline) - A New Hampshire federal court has entered final default judgments against the New Futures Trading International Corporation and Henry Roche, a Canadian resident who directed the company.
The judgments are the result of actions by the Securities and Exchange Commission filed in November 2011. The SEC alleged the company operated a Ponzi scheme. Among other things, the court ordered the parties to pay a total of over $2.8 million.
The SEC alleged that Roche, through New Futures, sold unregistered securities in the United States through operations in New Hampshire and Ontario, Canada. Since December 2010, Roche has allegedly raised over $1.3 million from at least 14 investors in nine states through the offer and sale of high yield promissory notes purportedly yielding either 5 percent to 10 percent per month, or a 200 percent return within 14 months.
According to the complaint, Roche said funds supplied would be invested in bonds, treasury notes and/or 10-year treasury note futures contracts or directly in New Futures, which Roche said was an on-line futures day-trading training business he was operating from Canada.
But the SEC alleged that, instead of using the funds for either purpose, Roche used approximately $937,000 to make Ponzi "interest" payments to investors in prior Roche-controlled entities. Roche also allegedly misappropriated at least another $359,000 to support his lifestyle, to operate a horse breeding venture, and to buy horses.
The court, acting on the SEC's motion for default judgments, entered final judgments: "(1) imposing permanent injunctions against both New Futures and Roche enjoining them from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (2) ordering them each to pay disgorgement of their ill-gotten gains in the amount of $1,242,972 plus prejudgment interest of $40,917.47; and (3) ordering Roche to pay a monetary penalty in the amount of $150,000 and New Futures to pay a monetary penalty in the amount of $150,000."