One World Capital Group Ordered to Pay $520,000 in Sanctions
March 5, 2010
The Commodity Futures Trading Commission (CFTC) on Thursday announced that it obtained an order against foreign exchange dealer One World Capital Group, LLC of Winnetka, Ill. and its president, John Edward Walsh, of Lake Forest, Ill., requiring each to pay a $260,000 fine for failing to demonstrate compliance with CFTC net capital requirements.
The consent order, issued by the United States District Court for the Northern District of Illinois, resolves a complaint brought by the CFTC on December 13, 2007 charging One World, a registered futures commission merchant and forex dealer member, and Walsh, with “inability to demonstrate compliance with capitalization requirements and with failure to maintain required books and records as required by federal commodity laws,” according to a CFTC release.
According to the order, Walsh admitted that he could not make the required net capital calculation because he was unable to determine One World’s current liabilities to forex customers or One World’s ability to pay its customer liabilities.
The known financial accounts held in the name of One World on December 13, 2007, contained a total of only $639,815, which was at least $9 million short of the claimed liabilities to customers who maintained accounts with One World for the purpose of trading foreign currency contracts, the CFTC said.
The order also states that One World and Walsh failed to maintain books and records as required by CFTC regulations.
In a separate action on March 4, based on the facts of the federal district court case, the CFTC simultaneously filed and settled a statutory disqualification action against One World Capital Group, revoking its registrations as a futures commission merchant and commodity trading advisor.
In January 2009, Walsh was arrested on federal fraud charges in connection with the operation of One World Capital Group. In February, 2009, criminal authorities seized assets of Walsh and One World, including the funds frozen by the court in the CFTC action.
The CFTC coordinated its investigation with, and was assisted by, the National Futures Association (NFA).
