AUSTIN (KXAN) — The Texas State Securities Board issued an emergency cease and desist order April 3 against a Florida man for targeting Texans during the COVID-19 crisis and soliciting investments in a foreign exchange program that he claimed were “recession proof,” according to the order.
James Frederick Walsh, also know as Jim or “Stormy” Walsh, promoted a forex investment program that would return 11% and claimed his investments were “basically risk free.” Walsh, who is based in Boca Raton, published advertisements targeting Houston residents, according to the order.
“Although Respondent Walsh agreed to comply with the law, he is continuing to illegally and fraudulently offer securities, and he is now threatening immediate and irreparable harm to Texas residents,” the order states. “Walsh is now preying on concerns over the recent decline in securities markets, changes to the economy and the threat of coronavirus disease 2019, also known as COVID-19.”
Walsh called the program his “Master Account Client Trading Program.” He claimed to pay 60% of the profits to investors and keep the remainder. To cover the costs of banker charts and data for the development of investment strategies, he charged investors $150 a month, the order states.
Despite an order to stop, the securities board said Walsh continued to “deceptively” offer the Master Account program.
Walsh claimed his investments were “recession proof,” and his program would offer supplemental income to those unable to leave their house to support their family, according to the order.
Walsh said he earned $46,000 on a $100,000 account in 10 days, according to the securities board.
“Walsh is claiming he is earning greater profits now that COVID-19 has impacted the financial markets and that returns on investments in the Master Account Client Trading Program have tripled their value over the last four weeks,” according to the order.
Walsh hasn’t registered as a dealer or agent with the securities commissioner, and the investments have not been registered, according to the commission’s order.
The commission ordered Walsh to cease and desist selling securities, acting as a securities dealer and engaging in any security sale related fraud.
The securities board said the order was the first taken by a state security board against a promoter using the coronavirus pandemic to attract participants.
You can read more about the state securities board’s warning about financial schemes related to the pandemic here.
“Scammers will be targeting retail investors with tactics and products that track the recent economic and social trends, promising lucrative returns to people concerned about their portfolios and retirement plans,” the securities board said in a Friday statement.