SEC v. CLS Global FZC LLC; and Andrey Zhorzhes, No. LR-26287, District of Massachusetts (Apr. 17, 2025) — Press Release
raw: CLS Global FZC LLC
CLS Global FZC LLC, No. 1:24-cv-12590-AK (Apr. 17, 2025)
summary
The SEC obtained a final judgment against UAE-based market maker CLS Global FZC LLC for manipulating the NexFundAI crypto asset market to induce retail investor purchases.
paragraph
CLS Global FZC LLC consented to a final judgment for manipulating the market for the crypto asset 'NexFundAI' to create a false appearance of active trading. The entity faces a $425,000 civil penalty, $3,000 in disgorgement, and $80.39 in prejudgment interest. The judgment also includes injunctions against violating the Securities Act of 1933 and the Securities Exchange Act of 1934.
narrative
The SEC secured a final judgment against CLS Global FZC LLC, a crypto asset market maker based in the United Arab Emirates, for market manipulation. The firm allegedly orchestrated a scheme to induce retail investors to buy 'NexFundAI' by creating a false appearance of active trading. To resolve the matter, CLS Global consented to a judgment requiring $425,000 in civil penalties, $3,000 in disgorgement, and $80.39 in interest. The judgment also mandates that the firm cease doing business with U.S. persons through specific compliance undertakings. This monetary relief may be offset by a parallel criminal action in the District of Massachusetts. Finally, the entity is enjoined from further violations of the Securities Act and the Securities Exchange Act.
Classified market-manipulation(confidence 100%). EDGAR detection: forms SC 13D/G/13F· recall 53% / precision 9%. detection rule →
Statutes
Sections 17(a)(1) and (3) of the Securities ActSections 17(a)(1) and (3) of the Securities ActSections 17(a)(1) and (3) of the Securities ActSections 10(b) and 9(a)(2) of the Securities Exchange ActSections 10(b) and 9(a)(2) of the Securities Exchange ActSections 10(b) and 9(a)(2) of the Securities Exchange ActRule 10b-5
Parties
Securities and Exchange CommissionCLS Global FZC LLCAndrey Zhorzhes
Keywords
clsglobalsecurities exchangeexchange commissionwithin daysfzcllcsecuritiesexchangemarketfinal againstmarket makerarab emiratescrypto assetsections securities
Extracted insights
Dollar amounts 2
- $425K $425,000 $100K–$1M
- $3K $3,000 <$10K
Entities 5
- company cls global fzc llc
- person final judgment
- agency Securities and Exchange Commission
- company united arab emirates entity cls global fzc llc
- court u.s. district court for the district of massachusetts
Triples 12
- U.S. Securities And Exchange Commission Obtains Final Judgment Against So-Called Market Maker Based in the United Arab Emirates
- U.S. District Court For The District Of Massachusetts Entered Final Judgment Against United Arab Emirates Entity Cls Global Fzc Llc
- Securities And Exchange Commission Alleged That Cls Global Engaged In a Scheme To Manipulate The Market For Nexfundai
- Cls Global Fzc Llc Consented To The Entry Of The Final Judgment
- Final Judgment Includes An Order Enjoining It From Violating Sections 17(a)(1) And (3) Of The Securities Act Of 1933 And Sections 10(b) And 9(a)(2) Of The Securities Exchange Act Of 1934 And Rule 10b-5 Thereunder
- Final Judgment Includes An Order To Pay a Civil Penalty Of $425,000, Disgorgement Of $3,000, And Prejudgment Interest Of $80.39
- Final Judgment Includes An Order To Comply With Undertakings Aimed At Ensuring That Cls Global Ceases Doing Business With United States Persons Or Entities
- Payment Of The Monetary Relief May Be Offset By Any Amount Ordered And Paid To The United States In a Parallel Criminal Action
- Undertakings Require Cls Global To Take Reasonable Steps As Necessary To Ensure That Cls Global’s Clients Are Not U.S. Persons Or Entities
- Undertakings Require Cls Global To Implement Policies And Procedures Reasonably Designed To Ensure That Each New Client Is Not a U.S. Person Or Entity
- Undertakings Require Cls Global To Certify Compliance With The Undertakings Listed Above In Writing Within 45 Days And On An Annual Basis Thereafter For a Period Of Three Years
- Securities And Exchange Commission Conducts Litigation With David D’Addio And Amy Harman Burkart
Extracted body text (2,151c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26287 / April 17, 2025 Securities and Exchange Commission v. CLS Global FZC LLC and Andrey Zhorzhes, No. 1:24-cv-12590-AK (D. Mass. filed Oct. 9, 2024) SEC Obtains Final Judgment Against So-Called Market Maker Based in the United Arab Emirates On April 7, 2025, the U.S. District Court for the District of Massachusetts entered final judgment against United Arab Emirates entity CLS Global FZC LLC, a self-proclaimed crypto asset market maker, in a case where the Securities and Exchange Commission alleged that CLS Global engaged in a scheme to manipulate the market for “NexFundAI,” a crypto asset the SEC previously alleged was being offered and sold as a security to retail investors. The alleged scheme was intended to induce investor victims to purchase NexFundAI by creating the false appearance of an active trading market for it. CLS Global consented to the entry of the final judgment, which includes an order enjoining it from violating Sections 17(a)(1) and (3) of the Securities Act of 1933 and Sections 10(b) and 9(a)(2) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; an order to pay a civil penalty of $425,000, disgorgement of $3,000, and prejudgment interest of $80.39; and an order to comply with undertakings aimed at ensuring that CLS Global ceases doing business with United States persons or entities. The payment of the monetary relief may be offset by any amount ordered and paid to the United States in a parallel criminal action, United States v. CLS Global FZC LLC et al., No. 24-cr-10293 (D. Mass. 2024). The undertakings require CLS Global to: (a) within 30 days, take reasonable steps as necessary to ensure that CLS Global’s clients are not U.S. persons or entities; (b) within 30 days, implement policies and procedures reasonably designed to ensure that each new client is not a U.S. person or entity; and (c) within 45 days, and on an annual basis thereafter for a period of three years, certify compliance with the undertakings listed above, in writing. The SEC’s litigation is being conducted by David D’Addio and Amy Harman Burkart.
OCR text (2,151c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26287 / April 17, 2025 Securities and Exchange Commission v. CLS Global FZC LLC and Andrey Zhorzhes, No. 1:24-cv-12590-AK (D. Mass. filed Oct. 9, 2024) SEC Obtains Final Judgment Against So-Called Market Maker Based in the United Arab Emirates On April 7, 2025, the U.S. District Court for the District of Massachusetts entered final judgment against United Arab Emirates entity CLS Global FZC LLC, a self-proclaimed crypto asset market maker, in a case where the Securities and Exchange Commission alleged that CLS Global engaged in a scheme to manipulate the market for “NexFundAI,” a crypto asset the SEC previously alleged was being offered and sold as a security to retail investors. The alleged scheme was intended to induce investor victims to purchase NexFundAI by creating the false appearance of an active trading market for it. CLS Global consented to the entry of the final judgment, which includes an order enjoining it from violating Sections 17(a)(1) and (3) of the Securities Act of 1933 and Sections 10(b) and 9(a)(2) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; an order to pay a civil penalty of $425,000, disgorgement of $3,000, and prejudgment interest of $80.39; and an order to comply with undertakings aimed at ensuring that CLS Global ceases doing business with United States persons or entities. The payment of the monetary relief may be offset by any amount ordered and paid to the United States in a parallel criminal action, United States v. CLS Global FZC LLC et al., No. 24-cr-10293 (D. Mass. 2024). The undertakings require CLS Global to: (a) within 30 days, take reasonable steps as necessary to ensure that CLS Global’s clients are not U.S. persons or entities; (b) within 30 days, implement policies and procedures reasonably designed to ensure that each new client is not a U.S. person or entity; and (c) within 45 days, and on an annual basis thereafter for a period of three years, certify compliance with the undertakings listed above, in writing. The SEC’s litigation is being conducted by David D’Addio and Amy Harman Burkart.