The Securities and Exchange Commission has obtained an emergency court order to freeze the assets of Texas A&M finance professor Robert D. Watson, who resigned from that position last month, as well as Houston lawyer and certified public accountant Daniel J. Petroski and two firms. They are charged with defrauding U.S. investors by using forged bank records to make it appear they were earning spectacular returns in foreign exchange trading.
The SEC’s complaint, filed in federal court in Houston, alleges that Watson and Petroski raised more than $19 million from investors and claimed they would earn profits through “Alpha One,” a foreign-currency trading software program purportedly owned by their firm PrivateFX Global One Ltd. They claimed they would employ the services of 36 Holdings Ltd., a so-called “deal clearing company” owned and controlled by Watson. The SEC alleges that Watson and Petroski misrepresented to investors that it had millions of dollars in bank accounts in the U.S. and Switzerland and that their foreign exchange trading business had achieved an annual return of more than 23 percent since its inception and has never had a losing month. The SEC alleges that the defendants’ historical performance claims are not supported by valid financial records.
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