Release: #4052-97 (97-Civ 6800)

For Release: September 16, 1997

CALIFORNIA COURT ISSUES TEMPORARY RESTRAINING ORDER AND ASSET FREEZE
    ORDER IN CFTC ENFORCEMENT ACTION AGAINST L.A. FOREX, INC. AND TWO
    INDIVIDUALS, ALL OF REDONDO BEACH, CALIFORNIAFiling of Action Results from Cooperative Enforcement Effort Between
    CFTC, Redondo Beach Police Department, and California Department of
    Corporations
    WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced
    today that the Honorable Mariana Pfaelzer of the U.S. District Court for
    the Central District of California entered a temporary restraining order
    and an asset freeze order against L.A. Forex, Inc., Gabor Urban
    (president of L.A. Forex), and Marta Ban (vice president of L.A.
    Forex), all of Redondo Beach, California. None of the defendants has ever
    been registered with the CFTC in any capacity.

The court's temporary restraining order prohibits the defendants from
    soliciting or accepting funds from the public in any investment relating to
    commodity futures. In addition, the asset freeze order freezes the
    defendants' assets and prohibits them from both destroying books and
    records and denying CFTC representatives access to such records. The order
    was entered on September 15, 1997.Defendants Allegedly Misappropriated More than $900,000 in Investors'
    Funds and Used the Funds for Personal Items
    The court's action stems from a five-count civil complaint filed by the
    CFTC on September 12, 1997, alleging that since early 1996 the defendants
    misappropriated more than $900,000 in a fraudulent Ponzi scheme in
    connection with their operation of an unregistered commodity futures
    pool.

Specifically, the CFTC complaint alleges that the defendants falsely
    represented to prospective and current investors that their commodity
    futures trading has been highly profitable when, in fact, the only trading
    conducted by Urban and Ban sustained over $670,000 in trading losses. The
    defendants made "profit" payments to current investors using money received
    from newer investors, in order to create an illusion of profitable trading,
    the complaint alleges.

In addition, the CFTC complaint alleges that the defendants made
    numerous fraudulent misrepresentations and omissions in the course of their
    solicitation of investors. Defendants allegedly misrepresented to
    investors, among other things, that their trading record was highly
    profitable and that they would implement measures to reduce the risk of
    futures trading. Defendants also allegedly misrepresented the risky nature
    of trading futures. Finally, the complaint alleges that defendants failed
    to disclose that they were misappropriating investors' funds for their own
    use, that most trades resulted in significant losses, and that "profits"
    were being paid out of other investors' principal.

The CFTC's injunctive action is a result of a cooperative civil and
    criminal investigation by the CFTC; the Redondo Beach, California, Police
    Department; and the California Department of Corporations. On September 11,
    the Redondo Beach Police Department served a criminal search warrant on the
    defendants and seized defendants' trading equipment and commodity pool
    records.

A Second Hearing on the Temporary Restraining Order is Set for
    September 23, 1997

On Monday, September 23, 1997, the court will consider the CFTC's
    request for a temporary restraining order prohibiting violations of the Commodity Exchange Act (CEA) and CFTC regulations as charged, ordering
    an accounting, and allowing expedited discovery against defendants. The
    court will also consider the CFTC's request for an order to show cause as
    to why the court should not issue a preliminary injunction against the
    defendants.

In its litigation against the defendants, the CFTC is seeking
    preliminary and permanent civil injunctions in addition to other remedial
    relief, including cease and desist orders, an accounting, disgorgement of
    unlawfully obtained benefits, and civil penalties to be assessed by the
    court separately against each defendant in amounts not to exceed the higher
    of $110,000 or triple the monetary gain to defendants for each violation of
    the CEA and CFTC regulations.