Securities Commissioner Travis J. Iles entered an Emergency Cease and Desist Order against Forex Birds, LTD and PEK Universe for fraudulently offering online investments tied to forex and cryptocurrencies. The action also named Kumar Babu Bondesi and Darwin Eric Balusek – the who uses the nickname “Bitcoin Pope.”
The respondents, operating from overseas, are accused of using online solicitations and other means of recruiting investors in the off-market programs. They are allegedly enticing investors with promises of significant returns – Forex Birds was allegedly telling investors it could earn an 11 percent return, with deposits fully insured up to $1 million. According to the order, Balusek was even telling investors they could earn five percent in profits after 24 hours for four days by investing with Forex Birds.
Forex Birds is accused of fraudulently touting its legitimacy to lure investors. It claimed to be regulated and registered with the “Europian [sic] and Investments Commission,” as well as the Australian Securities and Investments Commission and the Saint Vincent Finance Service Authority. The order found the representations regarding registration were false. Even if true, according the order, Forex Birds was not registered to deal in securities in Texas.
The state registration requirements are important components of investor protection. Registrants need to undergo a thorough background check, adhere to regulatory standards and periodically open their books and records to state inspection.
Pek Universe, the alleged promoter of cryptocurrency programs, was promising to earn daily profits for investors – up to 1.9 percent per day for 30 days. Among other things, it is accused of using fraudulent photographs to depict its board of directors.
Additionally, Pek Universe was not registered to deal in securities in Texas.
“Promoters of fraudulent schemes do not count on investors conducting meaningful due diligence,” said Commissioner Iles. “The fact is that due diligence my be the single most effective fraud-preventing measure for investors.” He added that retail investors should almost always be dealing with registered firms and their employees, and they should contact their state regulator before – not after – investing, to ask questions about an offering.
Contact – Joe Rotunda, Director of Enforcement, at 512-305-8392 or firstname.lastname@example.org.