The CFTC has secured a preliminary injunction agreement with EminiFX owner Eddy Alexandre.

The proposed injunction, which awaits approval from the court, was filed on June 14th.

A consented to preliminary injunction between the CFTC and Alexandre saves the need to schedule a hearing and expend additional resources.

Defendants, without admitting or denying the allegations of the Complaint for purposes of this Consent Order for Preliminary Injunction Against Defendants Alexandre and EminiFX … hereby consent to the entry of this Order.

Further, Defendant Alexandre has no objection to the Receiver entering into a Consent Order on behalf of Defendant EminiFX as long as such Consent Order is without admitting or denying liability.

The CFTC’s complaint alleges six counts of fraud against Alexandre. The CFTC’s underlying complaint, that forms the basis of their case against Alexandre and EminiFX, will continue to play out in court.

There are also parallel criminal proceedings against Alexandre in play.

With respect to the consented preliminary injunction, it is essentially a continuation of the granted SRO.

The EminiFX Temporary Receivership will be made permanent, and Alexandre’s and EminiFX’s assets will remain frozen.

The only thing holding up court approval of the proposed injunction, is a letter objection filed by Christopher and Maureen Beil.

The Beils were in the process of selling a property to Alexandre when the CFTC filed its lawsuit. They accepted a deposit from Alexandre, which the CFTC and EminiFX Receivership claim are investor funds.

As part of the marshalling of assets process, the Receiver has demanded the Beils turn over the paid deposit.

The Beils object on the basis that if the EminiFX Receiver has legal authority to act on behalf of Alexandre, he should be bound to the terms of the sale contract.

In their June 14th letter to the court, the Beils ask that sections of the proposed injunction, that “seek to bestow Receiver with the authority over the assets of Alexandre Estates LLC”, be “struck entirely”.

In response to the Beil’s letter, the Receiver wrote;

The Objection misconstrues the Proposed Consent Preliminary Injunction, mischaracterizes the position of the Receivership, and misstates key facts, all in an attempt to obtain priority to recover $535,000 in funds traceable to innocent customers ahead of, and at the expense of, those customers.

The Receiver goes on to point out that the Beils will have the opportunity to file a claim against EminiFX at a later date, the same as any other party.

The disputed half a million is currently being held in an account tied to the law firm Maureen Beil works at. The Receiver points out this is not an “independent” arrangement, supporting the claim the funds be released to the Receivership pending resolution of the Beils’ dispute.

In their own June 15th response to the Beil’s letter objection, the CFTC points out that

striking paragraphs 13, 28, and 19 of the Proposed Order—could leave the order without any asset freeze.

The asset freeze is critical to preserve the remaining assets of EminiFX customers.

The Sellers’ suggested remedy could render the Proposed Order ineffective and cause customers to lose additional funds far beyond the escrowed funds that the Sellers claim.

It’s highly unlikely the court is going to grant a preliminary injunction with the asset freeze section cut out.

A decision on the Beils’ letter objection remains pending. It is likely tied to granting of the preliminary injunction.

I’ll continue to monitor the case docket for updates.

 

Update 18th June 2022 – The Beil’s letter objection has been denied.

The Court need not entertain a motion for reconsideration that seeks to relitigate old issues, present new theories of liability, or otherwise take a second bite at the apple.

Ouch.

The denial order was issued on June 16th. On June 17th the court directed the Biels hand over Alexandre’s $535,000 deposit to the EminiFX Receiver.

 

Update 16th July 2022 – It’s looking like the CFTC’s case against Alexandre will be stayed. This is standard procedure when there are parallel criminal proceedings over related conduct.

Parties anticipate a motion to intervene by the DOJ, to be filed by July 25th. Over the next month responses and replies are to be filed, with a decision expected late August.

I’ll publish a separate article when the stay order hits.

 

Update 4th August 2022 – The DOJ filed its motion to stay CFTC EminiFX proceedings on July 25th. As of yet there’s no response from the CFTC.

Street Suites LLC, owners of the office space Eddy Alexandre was renting in New York, tried to keep a security deposit paid to them.

After refusing to return the deposit to the Receiver when requested to do so, the court ordered Street Suites LLC to comply on August 3rd.

On July 28th Alexandre requested modification of his bail conditions, from home incarceration to home detention.

The court granted the unopposed request on July 29th;

Defendant’s unopposed request is granted. Defendant’s bail conditions are modified from home incarceration to home detention to permit him to travel as necessary to work and in connection with work assignments.

All other conditions of Defendant’s bail, including the requirement that Defendant not engage in a job involving work with investments or in the financial industry prior to the resolution of this case and limitation of Defendant’s travel to the Southern and Eastern Districts of New York, remain the same.

A scheduled Status Conference is believed to have taken place on August 3rd. As at the time of this update there are no further updates on the DOJ EminiFX case docket.

 

Update 5th August 2022 – As per a minute entry for the August 3rd proceedings, we now have a EminiFX 2023 trial date.

 

Update 3rd September 2022 – The CFTC’s civil EminiFX fraud case has been stayed.

There’s also a brief update on the Beils; Following two denied attempts to keep $535,000 in stolen EminiFX investor funds, the Beils sought to force the EminiFX Receivership into arbitration.

The court put a stop to those efforts on September 2nd.