(HedgeCo.Net) The Securities and Exchange Commission has announced that, it has obtained a final judgment in its civil action against Steve H. Karroum and his Virginia-based company, FX & Beyond Corporation.
On February 16, 2017, the SEC filed a complaint in the U.S. District Court for the Eastern District of Virginia alleging that, from 2007 to 2014, Karroum and his company defrauded investors in a foreign exchange trading program. The complaint also named as a relief defendant Karroum’s wife, Sahar Karroum, for the purpose of recovering funds that Mr. Karroum unlawfully used for her benefit. Mr. Karroum passed away in January of 2018. In April 2018, Magistrate Judge Ivan D. Davis granted the SEC’s motion to substitute Sahar Karroum as heir and successor for Mr. Karroum as a defendant in the action. In June 2018, District Court Judge Anthony J. Trenga granted the SEC’s emergency motion to, among other relief, freeze certain proceeds that would otherwise be paid to Sahar Karroum from a life insurance policy owned by FX & Beyond.
The Honorable Anthony J. Trenga granted the SEC’s motion for final default judgment and settlement and entered a final judgment which ordered FX & Beyond to pay a civil penalty of $512,430 and disgorgement of $805,960, plus prejudgment interest of $74,266. The judgment also enjoined FX & Beyond from violating the antifraud provisions of Section 17(a) of the Securities Act, and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder, as well as the registration provisions of 5(a) of the Securities Act. It also enjoined FX & Beyond from directly or indirectly participating in the issuance, offer or sale of securities. As part of the resolution of the action, the final judgment dismissed all claims against Mr. Karroum’s widow, Sahar Karroum.