WIKIFX REPORT: US govt seeks to intervene in CFTC case against EminiFX

The US Government is trying to intervene in the Commodity Futures Trading Commission (CFTC) case against Eddy Alexandre and his company, EminiFX, Inc. This becomes clear from a set of documents filed by the Government in the New York Southern District Court on July 25, 2022.

The United States Attorney for the Southern District of New York has signed a memorandum in support of a motion (i) to intervene in the CFTC case, pursuant to Rule 24 of the Federal Rules of Civil Procedure, and (ii) to stay discovery in this matter in its entirety until the completion of the trial or other disposition in the parallel criminal case, with the understanding that the receiver appointed by the Court will continue his oversight and administrative functions (such as securing assets and records, establishing a claims process for victims, and providing updates to the Court).

The Receiver and the CFTC do not oppose the Governments motions. Defendant Eddy Alexandre opposes the motion for a complete stay of discovery, but consents to the motion to intervene.

The Criminal Case arises from the same set of facts and circumstances that underlie the Civil Case. According to the Government, a full stay of discovery is appropriate because any exchange of discovery would be asymmetrical and would allow the overlapping defendant in the Criminal Case and Civil Case, Eddy Alexandre, to circumvent the criminal discovery rules and improperly tailor his defense in the Criminal Case.

In similar situations, courts in this Circuit and others have entered a complete stay of civil enforcement proceedings when there is a parallel criminal prosecution with overlapping defendants and facts, including over a defendants objection.

In May 2022, the CFTC filed a complaint against Alexandre and EminiFX alleging that Alexandre was operating EminiFX as a fraudulent enterprise and misappropriating EminiFX investor funds. On May 11, the CFTC moved for the Court to issue a statutory restraining order, inter alia, freezing the assets of EminiFX and Alexandre, and appointing the Receiver to take control of EminiFX, relief which this Court granted the same day.

On May 12, 2022, a criminal complaint against Alexandre was unsealed, and Alexandre was arrested and presented that same day. The Criminal Complaint charged Alexandre with one count of commodities fraud, in violation of Title 7, United States Code, Sections 9(1) and 13(a)(5), Title 17, Code of Federal Regulations, Section 180.1, and Title 18, United States Code, Section 2, and one count of wire fraud, in violation of Title 18, United States Code, Sections 1343 and 2.