Office of Proceedings 

U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

www.cftc.gov 

* 

PAUL CONNOLLY, 

Complainant, 

* 

* 

v. 

GREGORY COTTER, and 

TRI GLOBAL FX, INCORPORATED, 

Respondents. 

* * CFTC Docket No. 09-R27 

* 

* 

* 

* 

* 

INITIAL DECISION 

Before: Philip V. McGuire, Commodity Futures Trading Commission. 1 

Appearances: Steven Berk, Esq., Washington, D.C., for complainant Paul Connolly. 

Introduction 

Michael Norton, Esq., New York, NY, for respondents 

Gregory Cotter and Tri Global FX. 

Paul Connolly's principal allegation is that Greg Cotter, the principal trader and sole 

owner ofTri Global FX, Incorporated, a commodity trading advisor, allowed Connolly's entire 

account balance to be rapidly wiped out over three days by recklessly deviating from a 

promised "conservative" loss-limiting trading strategy which Cotter had presented to Connolly 

as based on close monitoring of the account, utilization of stop-loss orders and moderate trading 

leverage, avoidance of overnight exposure, and staying on the sideline during periods of 

unusually high volatility. Connolly also alleges that Cotter fraudulently induced him to open a 

1 Before being transferred to my docket, this proceeding had been on the dockets of Judges George Painter and 

Bruce Levine. 
managed forex account by promising steady returns based on: false and misleading marketing 

materials, a false track record of success, and false promises to utilize a conservative, losslimiting trading strategy. Cotter seeks to recover his entire lost investment of£160,000? 

In reply, Cotter has based his defense almost exclusively on the bare assetiion that his 

firm Tri Global FX had nothing to do with Connolly's forex account, and that it was another 

firm that purportedly had traded Connolly's account: an unregistered firm called "TGFX," also 

owned and controlled by Cotter. As explained below, after carefully reviewing the parties' 

documentary submissions and oral testimony, it has been concluded that Connolly has shown by 

a preponderance of the evidence: that, although Cotter may have incorporated a separate firm 

called TGFX, Inc., that firm that had nothing to with Cmmolly's forex account; that in his 

written and verbal dealings with Connolly and forex dealer Dukascopy during the relevant time 

Cotter used "TGFX" and "Tri Global FX" interchangeably to refer to the same firm; that 

Cotter and Tri Global FX managed Connolly's Dukascopy forex account; and that Cotter and 

Tri Global FX recklessly deviated from the promised strategy proximately causing damages 

totaling $221 ,909. 3 

This conclusion reflects my determination that Connolly produced testimony that was 

plausible when viewed in light of the surrounding factual circumstances, that was internally 

consistent, and that was notably more credible and convincing than Cotter's testimony.4 In 

2 In this initial decision, currency amounts are rounded to the nearest U.S. Dollar and British Pound. Based on a 

historical exchange rate of2.0273 on December 7, 2007, the date of Connolly's deposit, the U.S. Dollar equivalent 

of Connolly's £160,000 deposit on that date was $324,368. See http://www.oanda.com/currency/historical-rates. 3 The damage calculation is based on Connolly's losses after October 21, 2008, when the reported account balance 

was £129,122. See Dukascopy October 29,2008 portfolio statement, Connolly's trial exhibit 22. Based on a 

historical exchange rate of 1.7186 on October 22, 2008, the date of the initial catastrophic loss, the dollar 

equivalent of Connolly's £129, 122 losses is $221,909. See http://www.oanda.com/currencv/historical-rates. 4 Although Connolly produced a significantly more credible version of events, he did not produce sufficient 

evidence to establish by a preponderance of the evidence that the representations of Cotter's experience or past 

2 
sharp contrast, the Cotter produced testimony that was opaque, evasive and largely 

unsubstantiated by any reliable documentary evidence. Cotter's core assertion that his firm Tri 

Global FX had nothing to do with Connolly's forex account, a continuation of his dodges and 

evasions in the immediate aftermath of Connolly's catastrophic losses, was patently self-serving 

and specious, and contradicted by reliable evidence. 5 

Factual Findings 

The Parties 

1. Paul Connolly is an Irish resident of England. On his account application, Connolly 

stated that he had been born in 1958, and that his profession was real estate investor. Connolly 

had no previous forex or derivatives experience. 

2. Dukascopy Bank SA, a Swiss forex dealer at the relevant time, offered currency and 

precious metals trading to retail and institutional clients. Conrad D'Souza was Connolly's 

primary contact at Dukascopy. Neither Dukascopy nor D'Souza has ever been registered with 

the NFA. 

performance statements in the Tri Global marketing materials were false. In this connection, the record strongly 

suggests that Cotter may well have violated the Commodity Exchange Act and Commission rules by soliciting 

Connolly's managed account before Cotter and Tri Global had become registered, and by soliciting and trading 

Connolly's managed account before Cotter delivered aCT A disclosure document. However, Connolly never 

specifically alleged those particular violations. 

5 Cotter was represented by a different attorney when he raised this primary defense in his answer to Connolly's 

complaint. However, his current attorney, hired before the hearing, continued to press this defense. See~ 1, 

respondents' prehearing memorandum. This defense was not the only specious and evasive assertion made by 

Cotter in this proceeding. For example, in November 2007, in order to convince Connolly to open a managed forex 

account, Cotter had sent Connolly copies of a couple of then recent articles in Currency Trader Magazine that 

repmied the purpmied trading success ofTri Global. After filing his reparations complaint, in several submissions, 

Connelly mistakenly called the magazine Currency Magazine. However, the context of the factual circumstances 

set out in each submission unambiguously established that Connolly was actually referring to the articles in 

Currency Trader Magazine touted by Cotter. Nonetheless, in his motion to dismiss filed while this case was before 

Judge Painter, rather than directly address Connolly's allegations regarding the representations about past 

performance in those articles, Connolly chose simply to assert facetiously that he was not familiar with a magazine 

called Currency Magazine. Thus, Cotter used a narrow technical truth to foster a broader material dodge and 

deception. 

3 
At the recommendation of respondent Gregory Cotter, Connolly would select 

Dukascopy as his forex broker. See November 2, 2007 e-mail from Cotter to Connolly 

(Connolly's prehearing exhibit 5). On or about November 8, 2007, Connolly would 

electronically sign and execute various Dukascopy account-opening documents, including a 

request for opening of an account, limited power of attorney, fees agreement, risk disclosure 

statement, and a marketplace trading agreement. 6 Connolly would fund his Dukascopy account 

on December 5, 2007, and maintain the account until October 24,2008, when the account 

balance would be completely wiped out by catastrophic trading losses. 

Soon after Connolly's account had been wiped out, Dukascopy confirmed to Connolly 

that all trades in his forex account had been selected and placed by Tri Global. See Gianluca 

Flammia e-mail to Connolly dated October 28, 2008. [Unnumbered attachment to original 

complaint). Dukascopy also confirmed to Connolly that there had been "no technical issue[ s] 

related to the trades effectuated by your attorney (Tri Global FX) on your account." See Alain 

Bryon e-mail to Connolly dated October 29, 2008. [Unnumbered attachment to original 

complaint.] 

The $50 per contract commission ("interbank fee charge") charged to Cmmolly's 

account was split 50/50 between Dukascopy and Tri Global. See December 19, 2007 e-mail 

6 On this record it cannot be conclusively established exactly how Connolly accessed the Dukascopy accountopening documents. In his November 2, 2007 e-mail to Connolly, Cotter advised Connolly he could access the 

Dukascopy account-opening documents at Tri Global's website. However, on November 5, 2007, D'Souza 

advised Connolly to access the Dukascopy account-opening documents at Dukascopy's website, and on November 

6th e-mailed account-opening instructions. In any event, it is clear that Cotter and D'Souza were coordinating 

efforts during the account-opening process. Also, Cotter has not disputed that the undated and unsigned facsimiles 

of the Dukascopy and Tri Global account-opening documents produced for this proceeding by Connolly were the 

versions signed and executed by Connolly. 

4 
from Cotter to D'Souza. [Unnumbered attachment to Connolly's responses to Cotter's 

discovery requests.] 

3. Tri Global FX, Incorporated ("Tri Global"), a New York firm, at the relevant time 

was located in Roslyn Heights, New York. Tri Global applied for registration as a commodity 

trading advisor in July 2007, but its registration was not approved until December 2007. 

Therefore, Tri Global's registration application was still pending when Cotter solicited 

Connolly in November 2007. Tri Global's registration was terminated in March 2010. 

In April2007, Tri Global and Dukascopy entered into an External Asse1i manager 

Agreement, under which Tri Global agreed to introduce prospective customers to Dukascopy 

"with a view to managing their assets." [Respondents' answer.] As noted above, Tri Global 

and Dukascopy each took a 50 percent split of the commission revenue from Connolly's 

account. 

Respondents did not seek production of any corroborating documents, affidavits or oral 

testimony from Dukascopy or D'Souza. In contrast, C01molly sought and obtained from 

Dukascopy written confirmations that Cotter had used TGFX as an acronym for Tri Global in 

all of his dealings with Dukascopy, and that it was Tri Global and Cotter who had managed 

Connolly's forex account. 

4. Gregory Cotter was Connolly's and Dukascopy's primary contact at Tri Global. As 

described below, Cotter actively coordinated with Dukascopy's D'Souza the account-opening 

process for Connolly account. In sharp contrast, after the massive losses on October 22 and 24, 

2007, Cotter evaded Connolly's repeated requests to provide an explanation for the losses. 

Cotter never would provide a meaningful explanation. 

5 
During the relevant time frame, Cotter was a registered associated person with Tri 

Global from December 21,2007 to March 7, 2010. Cotter applied for registration on August 

14, 2007. Therefore, his registration was pending when he solicited Connolly's account. 

Cotter currently is not registered. 

5. Cotter was the president and sole principal ofTri Global. In this connection, Cotter's 

signature closing in all of his e-mail exchanges with Connolly and Dukascopy read: 

Gregory Cotter 

President 

Tri Global FX 

Similarly, Cotter's e-mail address that he used in all e-mail exchanges with Cmmolly and 

Dukascopy was "<info@triglobalfx.com>." 

6. On an unknown date, Connolly accessed from Tri Global's web site a Tri Global 

CTA Disclosure Document dated March 18, 2008, and titled "Disclosure Document of Tri 

Global FX, Inc." The introduction and discussion of the disclosure document identified Tri 

Global FX as the "Advisor," and identified Cotter as the president and head trader for Tri 

Global FX. The disclosure document did not contain a single reference to an entity called 

"TGFX." Rather it exclusively referred to Tri Global FX 

Cotter has not produced any evidence that Tri Global ever produced an earlier version of 

its CTA Disclosure Document, or provided to Connolly such earlier version of a CT A 

Disclosure Document before Connolly opened his account in November 2007. 

7. In November 2007, Cotter provided Cmmolly the following Tri Global accountopening documents to be electronically signed and executed: a managed account agreement, a 

limited trading authorization, a fee payment authorization, and a privacy statement. These 

6 
documents did not contain a single reference to an entity called "TGFX." Rather, these 

documents exclusively referred to Tri Global FX: 

• The account-opening instructions directed new clients to return signed 

documents to Tri Global FX, at its Roslyn Heights, New York address. 

• The managed account agreement was titled "Tri Global FX Inc. Managed 

Account Agreement," identified Tri Global FX Inc. as the "Advisor," and 

designated Gregory Cotter as authorized to sign the agreement on behalf ofTri 

Global FX Inc. 

• The limited trading authorization and power of attorney identified Tri Global FX 

Inc. as the "Advisor" to be granted the trading authority. 

• The fee payment authorization authorized the brokerage firm to deduct and remit 

advisory and management fees to Tri Global FX Inc. 

[Part 1 of Exhibit C, respondents' reply to Connolly's second request for production of 

documents number 5.] 

8. As noted above, Cotter provided Connolly a Tri Global FX CTA disclosure 

document and Tri Global FX account-opening documents. In other words, he did not provide 

Cmmolly a "TGFX" CT A disclosure document or "TGFX" account-opening documents. 7 

Similarly, in his direct dealings with Connolly, Cotter routinely held himself out as 

associated with Tri Global FX, and rarely used the term "TGFX." For example, in his 

introduction letter sent to Cotter on November 2, 2007, Cotter offered: "[I]fyou are interested 

in an investment in the forex market, we ask that you consider Tri Global FX." [Underlining 

added for emphasis. Connolly's Hearing Exhibit 5.] 

7 Cotter did own and control a New York firm called TGFX, which he claimed "was formed by Tri Global for the 

single purpose oftrading activities with Dukascopy." ~ 10 respondents' motion to dismiss filed April16, 2010. 

See also~ 2, Cotter affidavit filed December 10,2010. However, this claim cannot be squared with Cotter's failure 

to offer any explanation for the repeated references to Tri Global FX in his various communications with Connolly, 

or with the demih of any references to "TGFX," in the written materials that Cotter sent to Connolly or in Cotter's 

e-mails to Connolly. 

7 
Those isolated times that Cotter did use the term "TGFX," he clearly used it as an 

acronym for Tri Global FX. For example, the introduction to the Trading Advisory Agreement 

that Cotter provided Dukascopy read "Tri Global FX Inc. (TGFX), a New York corporation, is 

entering into an agreement with [firm name] corporation, regarding the trading of managed 

accounts." Also, in the first sentence of the "Tri Global FX Inc. Privacy Policy" statement, 

TGFX was explicitly used as an abbreviation for Tri Global FX Inc.: "Pursuant to Commodity 

Futures Trading Commission (CFTC) new rules, financial institutions like Tri Global FX Inc. 

(TGFX) are required to provide privacy notices to their clients." 

9. Not surprisingly, Dukascopy considered Tri Global FX to be the firm that was 

managing Com1olly's account, and considered TGFX to be no more than an acronym for Tri 

Global FX. 

First, on November 6, 2007, four days after Cotter had sent his introduction letter to 

Connolly, Conrad D'Souza ofDukascopy e-mailed Cmmolly account-opening instructions and 

a linlc to Dukascopy's account-opening documents with the following transmittal message: "Tri 

Global fx [sic] contacted me saying that you would be interested in opening a managed account 

with us." [Underlining added for emphasis. Com1olly's Hearing Exhibit 12.] 

Second, in an e-mail to Cotmolly on August 27, 2009, Dukascopy's legal department 

confirmed: 

With reference to your request, we can confirm to you that: 

"TCFX Inc". as mentioned in the attached Power-of-Attorney signed by you 

does designate the company Tri Global FX, Inc. 

Mr. Gregory Cotter was known by Dukascopy (Suisse) SA as President of 

TriGlobal FX Inc and acted towards Dukascopy (Suisse) on behalf of TriGlobal 

FX Inc." 

8 
Regarding Forex trades executed on your account, TriGlobal FX, Inc. was 

registered with Dukascopy (Suisse) SA as the Authorized Trader. 

Therefore, from our point of view, your account was managed by TriGlobal FX 

Inc. 

[Underlining added for emphasis. Connolly's Hearing Exhibit 1.] 

Third, in an e-mail to Connolly on November 10, 2009, Dukascopy's Director Alain 

Bryon and Administrator Bogdan Prensilevich confirmed that it in its dealings with Cotter and 

Tri Global, Dukascopy considered TGFX and Tri Global to be one and the same: 

According to your request and as already indicated to you several times, Dukascopy 

(Suisse) SA considers that TGFX Inc. (as mentioned in Trading Power-ofAttorneys signed by you) conespond[s] to the company Tri Global FX Inc. 

Dukascopy (Suisse) SA never had any relationship with the company TGFX Inc. 

Moreover, we inform you that the commissions paid by Dukascopy (Suisse) SA to 

Tri Global FX Inc. related to your account (USD 31'923.96) were paid to the 

following bank account: 

Tri Global FX 

ABA #---------

JP Morgan Chase 

Therefore, from the point of view ofDukascopy (Suisse) SA your account U----------

------- was managed by Tri Global FX Inc. duly represented by its president Mr. 

Gregory Cotter." 

[Underlining added for emphasis. Connolly's Hearing Exhibit 4.] 

Fomih, Dukascopy reiterated this in a letter, dated July 5, 2010, from its CFO and CEO 

to Connolly's lawyer: 

We reve1t [sic] to you regarding your letter dated 28 June 2010 related to the above 

mentioned subject. 

9 
According to your request and as already indicated to Mr., Connolly several 

times, Dukascopy Bank SA (hereinafter "Dukascopy") considers that TGFX Inc. 

was an abbreviation used to designate the company Tri Global FX Inc. and that Mr. 

Connolly's account UIN 36MxwWHIVn- ID 12553 was managed by Tri Global FX 

Inc. duly represented by its president Mr. Gregory Cotter. 

To support Dukascopy's point of view, we infmm you that activation email sent by 

Dukascopy to communicate the login details to access Dukascopy's trading system 

had been sent to info@trigiobalfx.com. 

Commissions paid by Dukascopy (USD 31 '923 .96) in relation with Mr. Connolly's 

account were paid to the following banlc account: 

Tri Global FX 

ABA #-----------

JP Morgan Chase 

Dukascopy never had any relationship with the company TGFX Inc. 

[Underlining added for emphasis. Connolly's Hearing Exhibit 1.] 

10. Paresh Kiri, an acquaintance of Connolly, suggested in November 2007 that he 

consider a forex account managed by Tri Global. See Cmmolly testimony, at pages 42-43 of 

hearing transcript; and Com1olly e-mail to info({Utriglobalfx.com ("Paresh tells me you are very 

good at what you do."). [Connolly's Hearing Exhibit 5.] Neither side called Kiri as a witness. 

A year later, in late October 2008, after Cotter had failed to respond to Connolly's 

multiple attempts to discuss the catastrophic losses on October 22 and 24, 2008, Kiri e-mailed 

Cotter urging him to answer Cmmolly's questions: "I do not believe Paul to be unreasonable in 

asking the questions he asks and [your ignoring his questions] certainly makes me look like a 

poor judge of character to introduce him to you." [Kiri e-mail to Cotter dated October 28, 2008 

(Exhibit E, Cotter's reply to Connolly's motion for second amended complaint, Exhibit E); see 

also Kiri e-mail to Cotter dated October 30, 2008 (Unnumbered attachment to original 

complaint).] 

10 
The solicitation and account opening 

11. As noted above, sometime in the fall of2007, Cmmolly's acquaintance Paresh Kiri 

suggested that he consider a forex account managed by Tri Global. On or about November 2, 

2007, Connolly submitted an inquiry to info@triglobalfx.com. 

In response to his inquiry, Cotter sent Connolly a letter of introduction, in which Cotter 

provided infom1ation regarding Tri Global FX and its Metro Forex trading system, and directed 

Connolly to Tri Global FX's website: 

Please allow us to introduce our company to you. We are recommended forex 

asset managers for financial institutions, high net worth individuals, hedge funds, 

etc., and now we would like to add you to our client base. We are 

reconm1ended forex asset managers for financial institutions, high net wmih 

individuals, hedge funds, etc., and now we would like to add you to our client 

base .... 

Attached are the August and September atiicles from Currency Trader Magazine 

that highlight the Bm·clays' ranking of one of our retail managed account 

programs, Metro Forex Inc., as #1 for the $1MM to $1 OMM asset class. We 

manage both retail and institutional assets and look forward to discussing your 

situation with you .... 

My senior traders and I have each been trading in the foreign cunency markets, 

and only these markets, for over 20+ years and for some of the largest financial 

institutions in the world, such as: Societe Generale, Credit Suisse, Barclays, 

Merrill Lynch, etc. Allow us to apply our expe1iise and experience for you, and 

here is a link that explains more about us: http://www.triglobalfx.com/ourfirm .... 

Thus, if you are interested in an investment in the forex market, we ask that you 

consider Tri Global FX. We are experienced, successful and reputable foreign 

currency asset managers with verifiable results and excellent references. Our 

Managed Accounts Program is only available through one of the recommended 

forex brokers shown on our web site. For an account of this size we recommend 

you utilize Dukascopy and their account opening documents are shown on our 

web site. We have copied Comad-D'Souza ofDukascopy on this email so that he 

may expect to see your account opening documents soon. 

[Underlining added for emphasis. Connolly's Hearing Exhibit 5]. 

11 
In this connection, Cotter also sent various marketing materials, including the October 

2007 issue of the Barclay Institutional Report, in which Cotter described the Metro Forex 

"Trading Method" for Tri Global FX managed accounts: 

METRO FOREX's multi-disciplined approach involves a blend of 

fundamental and automated technical techniques. Asset allocations are 

determined by our trading committee according to planned risk parameters 

and reward expectations. We seek to minimize risk while still trying to 

maintain high portfolio returns. Trades are supported by stop-loss orders and 

risk management software. Tri Global FX normally seeks to profit from shmi 

te1m positions that may last for a few days or close intra-day. While they 

appreciate long-term trends and are always aware of them, they prefer to have 

many scaled-in positions rather than a large one-sided transaction. While Tri 

Global FX's traders bring proprietary systematic analysis to their trading, 

they should be classified as discretionary traders, since they believe that the 

two are not mutually exclusive and actually complement each other and 

neither should be ignored. Typically Tri Global FX's traders use only 

moderate trading leverage between 1:1 and 10:1 for most trades and usually 

at the lower end of the range. The goal is to minimize return volatility. 

[Underlining added for emphasis. Connolly's Hearing Exhibit 22.] 

12. After exchanging e-mails with Cotter on November 5, 2007, Connolly opened a 

managed account. [Connolly's Response to Cotter's Document Requests.] During another email exchange on November 15,2007, Cotter guided Connolly through opening the managed 

account. [Connolly's Response to Cotter's Document Requests.] Connolly signed and 

executed the following Tri Global FX account-opening documents: a managed account 

agreement, a limited trading authorization, a fee payment authorization, and a privacy 

statement. Cmmolly signed and executed the following Dukascopy account-opening 

documents: marketplace trading agreement, limited power of attorney and risk disclosure 

statement. On December 7, 2007, Cotter asked Connolly ifhe had sent funds to Dukascopy, 

12 
and Connolly confirmed that he had wired £160,000 to Dukascopy. [Unnumbered attachment 

to Connolly's original complaint.] 

13. In discovery, Cotter produced the Tri Global FX commodity trading advisor 

disclosure document, which was dated March 18, 2008, well after Connolly had opened the 

account managed by Cotter and Tri Global FX. The Tri Global FX disclosure document 

featured a performance chmi which claimed: one, that Cotter had begun trading his "Metro" 

forex trading system in 2005; two, that Cotter traded for eight accounts, none of which had 

been closed; three, that Cotter had almost $16 million in assets under management; four, that 

Cotter's worst and only monthly drawdown had been 0.4% in February 2005; and five, that 

Cotter had realized annual rates ofreturn of 17.36%, 46.94% and 46.78%, in 2005, 2006 and 

2007 respectively. 

The Tri Global FX Disclosure Document described Cotter's trading strategy as follows: 

The Advisor's Metro Forex trading asset management program is designed for 

sophisticated investors. Although the risk of loss exists in Forex trading, the 

objective of the Advisor is to achieve consistent and above average returns on its 

assets under management through trading and speculation in Forex trading, No 

assurance can be given that this objective will be met, and an investment in an 

account to be traded by the Advisor should only be considered by investors that 

can assume the significant risk of such trading, including losses in excess of their 

initial investment. The Advisor will attempt to meet the objective of capital 

appreciation by making trading decisions based upon both fundamental and 

proprietary trading methods ... 

The trading systems of the Advisor draw upon the judgment, experience and 

knowledge of the fundamental and technical factors affecting various markets 

and attempts to identify optimal trading opportunities within these markets. The 

Advisor will generally employ an approach that utilizes both fundamental and 

technical methods when deciding to take positions in the Forex trading. The 

approach can generally be classified as fundamental in nature, although other 

methods can be employed by the Advisor. The Advisor will seek to exploit 

perceived market inefficiencies in the price of selected Forex trading contracts 

through both long and shmi positions. The Advisor has no set policy with respect 

13 
to the time horizons of its long or shmi positions, but places an emphasis on the 

short-term time frame. Positions are occasionally held overnight. In evaluating 

the various factors which make up a trading decision, the systems pay close 

attention to each trade's risk-reward potential, how it fits into the risk profile of 

the entire portfolio, and whether it adheres to the account's overall trading goals. 

The primary focus of the Advisor's trading program is in the spot Forex trading 

primarily in the G-7 currencies (United States, Japan, Germany, France, United 

Kingdom, Italy and Canada), Forex trading markets, although the Advisor has 

sole discretion as to which spot Forex trading contracts it will trade. 

[Part 1 of Exhibit C, respondents' reply to Com1olly's second request for production of 

documents number 5.] 

Trading Activity 

14. Both sides produced minimal evidence, such as account statements or summaries, 

concerning the trading activity before the large losses in October 2008. 

On February 6, 2007, Cotter sent Connolly an e-mail indicating that the first month of 

trading had been profitable: 

I am sure you saw the January results in your Dukascopy account by now, and 

we trust that you are pleased so far. 

When we spoke last time you said that you would consider increasing your 

investment, if you were pleased with the results. 

We look forward to hearing from you again soon. 

[Unnumbered attachment to Connolly's original complaint.] 

Connolly has indicated that Cotter sometimes stayed on the sideline during times of 

market volatility, but has not specified when. In any event, by October 16, 2008, the account 

14 
balance had declined by almost £20,000, from £160,000 to £140,153. See Dukascopy portfolio 

statement dated October 29, 2008. [Connolly's Hearing Exhibit 19.] 

15. On October 21,2008,£10,914 in trading losses and charges reduced the account 

balance to £129,122. Despite this loss, Cotter did not appear to alter his trading strategy. 

On October 22, 2008, £47,267 in trading losses and charges reduced the account balance 

to $81,855. On October 23, 2008, £4,632 in modest trading profits temporarily increased the 

account balance to £86,488. However, on October 24, 2008, £86,733 in trading losses and 

charges wiped out the account, resulting in a negative balance of £246. See Dukascopy 

portfolio statement dated October 29, 2008. [Connolly's Hearing Exhibit 19.] 

Aftermath 

16. On or about October 24, 2008, Connolly first tried phoning Cotter at the Tri Global 

office, but no one answered the phone. After a couple of days, Connolly reached Cotter who 

asserted vaguely that Dukascopy technical problems had caused the large losses and that 

Connolly should direct his questions to Dukascopy. After Dukascopy informed Com1olly that it 

had not experienced any technical problems in connection with his account, Cotter dodged 

repeated follow-up inquiries from Connolly for a more complete explanation. 8 [Connolly email to D'Souza, dated October 26, 2008 (Cotter's Answer to Connolly's Motion for 2nd 

Amended Complaint Exhibit "E"); Connolly e-mails to Cotter, dated October 27, 28, 29 and 

30, 2008 (Unnumbered attachments to Connolly's original complaint); Kiri e-mail to Cotter, 

dated October 28, 2008 (Exhibit E, Cotter's Answer to Connolly's Motion for 2nd Amended 

8 At the hearing, Cotter asserted, for the first time in this proceeding, that an unknown number of the trades in 

Connolly's account had been placed by Dukascopy. This assertion was particularly unconvincing and preposterous 

in light of the total absence of any disclosure to Connolly at the relevant time the fact that Dukascopy would be comanaging his account with Tri Global FX. 

15 
Complaint) ; Connolly e-mail to Broyon (Dukascopy) dated October 29, 2008 (Unnumbered 

attachment to Connolly's original complaint); and Broyon (Dukascopy) e-mail to Connolly 

dated October 29, 2008 (Unnumbered attachment to Connolly's original complaint).] 

Conclusions 

Connolly has shown by a preponderance of the evidence that Cotter used "TGFX" and 

"Tri Global FX" interchangeably to refer to the same firm, in his written and verbal 

communications and dealings with Connolly and forex dealer Dukascopy at the relevant time, 

and that it was Cotter and Tri Global FX that managed Com1olly's Dukascopy forex account. 

Cotter's insistence that his firm Tri Global FX had nothing to do with Connolly's forex account 

was patently self-serving and specious, and contradicted by reliable evidence. For example, 

Dukascopy repeatedly confirmed that Cotter had used "TGFX" as an acronym for Tri Global in 

all of his dealings with Dukascopy, that Dukascopy had a contractual relationship with Cotter 

and Tri Global FX, that all trades in Connolly's forex account had been selected and placed by 

Cotter and Tri Global FX, that Tri Global FX and Dukascopy had split commissions charged to 

Connolly's account, and that Dukascopy made all related payments to a Tri Global FX bank 

account. Dukascopy's confirmations were consistent with Cotter's written communications 

with Connolly, where he clearly held out Tri Global FX as the firm that was dealing with 

Connolly and that would be trading for Connolly. Unfortunately, Cotter's unsubstantiated and 

ultimately absurd assertion that his firm Tri Global FX had nothing to do with Connolly's forex 

account appears to be no more than a continuation of his various disingenuous dodges in the 

immediate aftermath of Connolly's catastrophic losses. 

16 
The fact that, during the first ten months of trading the account, the £20,000 in 

aggregate losses represented no more than about one-eighth of Connolly's investment supports 

the conclusion that before the catastrophic losses on October 22 and 24, 2008, Cotter appeared 

to have stuck to his promised trading strategy of using stop-loss orders, moderate leverage and 

other tactics to limit the size oflosses. Then, on October 21,2008,£10,914 in trading losses 

and charges reduced the account balance to £129,122. Despite the fact that this loss--

significant relative to previous losses -- should have signaled caution, Cotter has produced no 

evidence that he took any reasonable protective steps to minimize further losses. Next, on 

October 22, 2008, £4 7,267 in trading losses and charges, which represented 25% of Connolly's 

investment, reduced the account balance to $81,855. In connection with these trades, Cotter 

also has produced no evidence that he took any reasonable steps to minimize further losses 

consistent with the promised conservative trading strategy. On October 23, 2008, £4,632 in 

modest trading profits temporarily increased the account balance to £86,488. However, on 

October 24, 2008,£86,733 in trading losses and charges, representing over 50% of Connolly's 

investment, wiped out the account, resulting in a negative balance of £246. In connection with 

these trades, Cotter again has produced no evidence that he took any reasonable steps to 

minimize fmiher losses consistent with the promised trading strategy. The disproportionately 

large size of these losses in relation to the previous losses over the first ten months supports the 

rebuttable presumption that Cotter had recklessly deviated from the loss limiting strategy that he 

had previously utilized and that he had promised he would follow when he convinced Connolly 

to open a forex account and give Cotter and Tri Global FX discretionary authority to trade 

pursuant to the approved loss-limiting trading strategy. Despite the fact that Cotter was in the 

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best position to produce relevant records from Tri Global FX and Dukascopy to explain and 

justify his trading strategy in October 2008, Cotter chose to offer neither records nor 

explanation. Rather, Cotter chose to rely exclusively on the specious claim that his firm Tri 

Global FX had nothing to do with the trading in Connolly's account. By failing to produce a 

scintilla of evidence regarding his trading strategy in October 2008, Cotter has failed to rebut 

the presumption that he had recklessly deviated from the approved conservative loss-limiting 

trading strategy. 

Cotter's breach constituted a violation of Section 4.Q(l)(B) ofthe Commodity Exchange 

Act. 9 The proper measure of damages proximately caused by this violation is Connolly's outof-pocket losses.after October 21, 2008, when the reported account balance was £129,122. 

Based on a historical exchange rate of 1. 7186 on October 22, 2008, the date of the initial 

catastrophic loss, the dollar equivalent of Com1olly's £129,122 loss is $221,909. 10 

ORDER 

Paul Connolly has established by a preponderance of the evidence that Gregory Cotter 

violated Section 4.Q(l)(B) of the Commodity Exchange Act, that this violation proximately 

caused damages totaling $221,909, and that Tri Global FX, Incorporated is liable for Cotter's 

fraud pursuant to Section 2(a)(l)(B) ofthe Act. Accordingly, Gregory Cotter and Tri Global 

FX, Incorporated are ordered to pay to Paul Connolly reparations of $221,909, plus 

9 Section 4Q(l)(B) of the Commodity Exchange Act, 7 U.S.C. § 6o(l)(B), provides in pertinent pmt: "It shall be 

unlawful for a commodity trading advisor, associated person of a commodity trading advisor, ... by use of the 

mails or any means or instrumentality of interstate commerce, directly or indirectly to engage in any transaction, 

practice, or course of business which operates as a fraud or deceit upon any client or participant or prospective 

client or participant." 10 See footnote 3, supra. 

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prejudgment and post-judgment interest on that amount at 0.15%, from October 22, 2008, to the 

date of payment, plus $250 for the cost of the filing fee. Liability shall be joint and several. 

Dated March 29,2013. 

Philip V. 

Judgment Officer 

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