Release:
    #4177-98

For Release:
    August 12, 1998

CFTC FILES
    SEVEN-COUNT ENFORCEMENT ACTION AND OBTAINS AN ASSET FREEZE AGAINST NEW YORK
    CURRENCY EXCHANGE CORPORATION, NEW YORK CURRENCY RESEARCH CORPORATION, AND
    MICHAEL T. MATEJKA IN ILLEGAL CURRENCY FUTURES FRAUD CASE

CFTC Complaint Alleges that the
    Defendants Committed Fraud in the Offer and Sale of Illegal Foreign
    Currency Futures Contracts to the General Public, Among Other Violations;
    Customers Alleged Defrauded Out of Over $3.5 Million by
    Defendants

WASHINGTON -- The Commodity
    Futures Trading Commission (CFTC) announced today that on August 6, 1998,
    it filed a seven-count civil injunctive complaint in the U. S. District
    Court for the Southern District of New York seeking emergency relief
    against New York Currency Exchange Corporation, New York Currency
    Research Corporation (both located in New York, New York) and Michael Thomas Matejka, president of both corporations.

The CFTC's complaint alleges that,
    from March 1995 through the present, the defendants violated the
    anti-fraud, registration, and various other provisions of the Commodity
    Exchange Act (CEA) and CFTC regulations by cheating and defrauding
    customers, offering and selling illegal futures contracts on foreign
    currencies, commingling and converting customer funds, bucketing orders,
    and operating as an unregistered futures commission merchant.

On August 6, 1998, the Honorable
    Judge John Koeltl issued a statutory ex parte restraining
    order freezing the assets of the defendants, prohibiting the defendants
    from destroying any of their books and records, and requiring them to make
    their books and records available for inspection and copying by the CFTC.
    In that order, Judge Koeltl granted the CFTC's request for a hearing on a
    motion for a preliminary injunction and set the hearing date for August 24,
    1998, before the Honorable Judge Allen Schwartz.

The CFTC complaint charges the
    defendants with cheating and defrauding customers out of over $3.5 million
    by making misrepresentations of material fact to prospective customers --
    including misrepresenting the likelihood of profit and the risk of loss in
    purchasing commodity futures contracts. For example, according to the
    complaint, the defendants made false promises of profits of $200,000 to
    $500,000 a month or of 30 to 40 percent per year when, in fact, none of the
    defendants' customers made such profits and most have been unable to recoup
    any of the money given to the defendants. The defendants were also charged
    with making false or misleading representations to customers that their
    money would be safeguarded and that their accounts faced very little risk
    of loss.

According to the CFTC complaint,
    the defendants allegedly solicited members of the public to become traders
    on the defendants' illegal currency futures exchange; induced customers to
    entrust money to the defendants with promises that customer funds would be
    segregated and available at any time; and commingled, misappropriated, and
    converted customer funds, wrongfully using customer funds for purposes
    other than trading on behalf of customers. Additionally, the defendants
    allegedly bucketed customer orders by not placing orders on a bona
    fide exchange and by taking the opposite side of most, if not all,
    customer orders.

CFTC Seeks Sanctions Against
    the Defendants Including Civil Fines, Disgorgement of Ill-Gotten Gains, and
    Restitution to Customers

In its continuing litigation
    against the defendants, the CFTC is seeking a cease and desist order
    prohibiting the defendants from violating federal commodity law,
    disgorgement of ill-gotten gains, restitution to the defrauded investors,
    and civil monetary penalties in an amount of not more than the higher of
    $110,000 ($100,000 for violations occurring before November 30, 1996) or
    triple the monetary gain to the each defendant for each violation of the
    CEA or CFTC regulations.

New York Currency Research Was
    Fined $110,000 in Previous CFTC Administrative Proceeding for Refusing to
    Produce Books and Records

In a previous administrative
    proceeding filed on December 17, 1997, the CFTC entered a cease and desist
    order against New York Currency Research Corporation and fined the company
    $110,000 for refusing to produce and allow CFTC representatives to review
    records it was required to keep and produce under the CEA and CFTC
    regulations. (See CFTC News Release #4089-97, December 18, 1997 [CFTC
    Docket #98-3].)

New York Currency Research was
    registered with the CFTC as a commodity trading advisor and commodity pool
    operator from January 16, 1996 until April 3, 1997. New York Currency
    Exchange has never been registered with the CFTC, and Matejka was
    registered during the period New York Currency Research was registered as
    its associated person and listed as its principal.