Texas Securities Commissioner Travis J. Iles entered an emergency action to stop Mirror Trading International PTY LTD, a South African international, multilevel marketing get-rich-quick scheme. He also cited four of its stateside, multilevel marketing agents, accusing them of illegally soliciting Texas investors.
According to the order, Mirror Trading, controlled by Cornelius Johannes “Johan” Steynberg, is recruiting multilevel marketers to illegally sell fraudulent investments in a bitcoin and forex pool. Investors allegedly purchase the products by transferring bitcoin to Mirror Trading. Mirror Trading purportedly pools bitcoin received from investors and transfers the cryptocurrencies to various unidentified forex brokers. According to the order, the bitcoin is then supposedly somehow traded on the forex market using artificial intelligence, generating ‘conservatively’ projected profits of 10 percent per month.
“These quick-to-profits schemes rely on a little bit of smoke and the shine of mirrors,” said Commissioner Iles. “Investors are often promised safe, lucrative returns; but promoters often fail to provide basic, required information to fully inform their prospective investors and satisfy their legal obligations.”
According to the order, Mirror Trading is concealing material information from potential investors, including important information about Steynberg, its forex brokers, its handling of cryptocurrencies, the artificial intelligence used to place trades and the significant risks associated with the product.
The order also accuses Mirror Trading of perpetrating the fraud though an illegal international multilevel marketing program. According to the order, in furtherance of the scheme, Mirror Trading is recruiting unregistered securities salespersons by promising to pay up to four streams of lucrative commissions. The actual value of the commissions depends on their success in recruiting new investors and multilevel marketers.
According to the order, Mirror Trading is boasting the accomplishments of its multilevel marketers, claiming it has now enrolled almost 76,000 members from more than 170 countries, including more than 22,500 since March 1, 2020.
Commissioner Iles named four multilevel marketers in the order: ForexAndBitcoin.com, Michael Cullison, Steve Herceg and Brian Knott. He accused them of illegally soliciting Texans by violating state law that requires the registration of securities and sellers of securities. The order also accused Mirror Trading and Steynberg of violating the same state laws.
“This may just be the tip of the iceberg,” said Joe Rotunda, the agency’s director of enforcement. “Fraudulent multilevel marketing get-rich-quick schemes gain momentum and spread like wildfire through the internet. We brought this action to quickly stop the illegal scheme before it irreparably harms Texans.”
Although the multilevel marketers are accused of promoting lavish returns generated by complex financial transactions, Commissioner Iles accused them of misleading Texans by concealing their qualifications and financial experience. According to the order, Cullison was a debtor in four bankruptcy cases and Knott twice filed for bankruptcy. Herceg also allegedly filed for bankruptcy protection.
Commissioner Iles reminds investors to be wary of get-rich-quick internet schemes, and to continue to investigate securities offerings before purchasing the investments. Investors can also report questionable or suspected fraudulent securities schemes in Texas directly to the agency by telephone at 512-305-8392 or by electronic mail at firstname.lastname@example.org.