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Filing # 185189258 E-Filed 10/31/2023 07:00:01 PM
IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA
CIRCUIT CIVIL DIVISION
CASE NO.: 2023-020202-CA-01
CODY KERNS, et al.,
Plaintiffs,
v.
FXWINNING, LTD., et al.,
Defendants.
/
AMENDED COMPLAINT AND DEMAND FOR JURY TRIAL
Plaintiffs, Cody Kerns (“Kerns”), Kerns Capital Management, Inc. (“Kerns Capital”),
and WFTMB Holdings LLC (“WFTMB”) as assignee of Christopher McGinnis (“McGinnis”)
(collectively, “Plaintiffs”), file their Amended Complaint and Demand for Jury Trial against
Defendants, FxWinning, Ltd. (“FXWinning”), Jonathan Lopez (“Lopez”), Julian Kuschner
(“Kuschner”), David Merino (“Merino”), Renan da Rocha Gomes Bastos (“Bastos”), Rafael
Brito Cutie (“Brito”) and BBRC Real Estate, LLC (“BBRC”) (FXWinning, Lopez, Kuschner,
Merino, Bastos, and Brito are collectively referred to at times as, “Defendants”), and allege:
THE PARTIES
1. This is an action for damages in an amount greater than $750,000.00, exclusive of
interest and costs, and is within the jurisdiction of this Court.
2. Plaintiff Kerns is a resident of Boca Raton, Florida, and is otherwise sui juris.
3. Plaintiff Kerns Capital Management, Inc. is a British Virgin Islands Corporation
with its principal place of business in Tortola, British Virgin Islands.
4. Plaintiff WFTMB is a Florida Limited Liability Company with its principal place
of business in Weston, Florida. It is the assignee of McGinnis based on a certain assignment
agreement between McGinnis and WFTMB whereby McGinnis assigned to WFTMB all claims or
causes of action that he has or may have against Defendants arising out of McGinnis’s investments
in and use of FXWinning, Ltd.’s foreign currency exchange platform.
5. Defendant FXWinning is a Hong Kong Limited Company with its principal place
of business at Unit 1411, 14/Floor, Cosco Tower, 183 Queen's Road Central, Sheung Wan, Hong
Kong. Upon information and belief, FXWinning also has offices in Dubai, Cyprus, and Miami-
Dade County, Florida.
6. Defendant Lopez is an individual who resides in Miami, Florida, and at all times
relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris.
7. Defendant Kuschner is an individual who resides in Miami, Florida, and at all times
relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris.
8. Defendant Merino is an individual who resides in Spain and, and at all times
relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris.
Upon information and belief, at all times relevant hereto, Merino was a founder and owner of
FXWinning. He is also the founder and owner of Merino Capital Solutions, Inc., a Florida
corporation with its principal place of business in Miami-Dade County, Florida.
9. Defendant Bastos is, upon information and belief, an individual who resides in
Miami-Dade, County, Florida, and at all times relevant hereto, conducted business in Miami-Dade
County, Florida, and is otherwise sui juris. Upon information and belief, at all times relevant
hereto, Bastos served as the de facto principal operations manager for FXWinning in the United
States.
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10. Defendant Brito is an individual who, upon information and belief, resides in the
United Arab Emirates and/or Cyprus, and at all times relevant hereto, conducted business in
Miami-Dade County, Florida, and is otherwise sui juris. At all times relevant hereto, Brito served
as the Chief Executive Officer of FXWinning and was a co-owner of FXWinning with Merino.
11. Defendant BBRC is a Florida Limited Liability Company with its principal place
of business in Orlando, Florida.
JURISDICTION AND VENUE
12. Personal jurisdiction over FXWinning is proper pursuant to Section 48.193(2),
Florida Statutes, because FXWinning engages in substantial and not isolated activity within
Florida.
13. Personal jurisdiction over FXWinning is also proper pursuant to:
a. Section 48.193(1)(a)(1), Florida Statutes, because it personally, or through its
agents, operates, conducts, engages in, or carries on a business or business venture
in this state;
b. Section 48.193(1)(a)(2), Florida Statutes, because it personally, or through its
agents, committed a tortious act within this state;
c. Section 48.193(1)(a)(6)(a), Florida Statutes, because it caused injury to persons or
property within this state arising out of an act or omission made by FXWinning
outside this state while FXWinning was engaging in solicitation or service activities
within Florida; and
d. Section 48.193(1)(a)(7), Florida Statutes, because it breached a contract in Florida
by failing to perform acts required by the contract to be performed in Florida.
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14. Personal jurisdiction over Merino is proper pursuant to Section 48.193(2), Florida
Statutes, because Merino engages in substantial and not isolated activity within Florida.
15. Personal jurisdiction over Merino is also proper pursuant to:
a. Section 48.193(1)(a)(1), Florida Statutes, because he personally, or through his
agents, operates, conducts, engages in, or carries on a business or business venture
in this state;
b. Section 48.193(1)(a)(2), Florida Statutes, because he personally, or through his
agents, committed a tortious act within this state; and
c. Section 48.193(1)(a)(6), Florida Statutes, because he caused injury to persons or
property within this state arising out of an act or omission made by Merino outside
this state while he was engaging in solicitation or service activities within Florida.
16. Personal jurisdiction over Brito is proper pursuant to Section 48.193(2), Florida
Statutes, because Brito engages in substantial and not isolated activity within Florida.
17. Personal jurisdiction over Brito is also proper pursuant to:
a. Section 48.193(1)(a)(1), Florida Statutes, because he personally, or through his
agents, operates, conducts, engages in, or carries on a business or business venture
in this state;
b. Section 48.193(1)(a)(2), Florida Statutes, because he personally, or through his
agents, committed a tortious act within this state; and
c. Section 48.193(1)(a)(6), Florida Statutes, because he caused injury to persons or
property within this state arising out of an act or omission made by Brito outside
this state while he was engaging in solicitation or service activities within Florida.
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18. This Court also has personal jurisdiction over Merino and Brito because they
entered into a conspiracy with Lopez, Kuschner, and Bastos to commit fraud against Plaintiffs in
Florida by, among other things, making misrepresentations to Plaintiffs such that Plaintiffs would
deposit money into, and/or withhold withdrawing money from, accounts at FXWinning, while the
conspirators knew that FXWinning was nothing more than a fraudulent scheme to induce investors
to transfer money to FXWinning, that FXWinning did not have the liquidity providers touted on
FXWinning’s website, that Plaintiffs would not receive a high rate of return, and that Plaintiffs
would never receive a full withdrawal of their deposited money as they were promised. That
conspiracy allowed the conspirators to receive commissions or the profits from the scheme directly
from Plaintiffs’ FXWinning accounts. Moreover, overt acts in furtherance of the conspiracy were
committed in Florida in that Kuschner and Lopez, in their individual capacities, and as agents of
Merino, made misrepresentations in furtherance of the conspiracy in Florida and Kuschner, Lopez,
and Merino met with Kerns and Kerns Capital in Miami, Florida.
19. Based on the foregoing conduct, the exercise of personal jurisdiction over
Defendants satisfies traditional notions of fair play and substantial justice under the Fourteenth
Amendment of the United States Constitution.
20. Venue is proper in Miami-Dade County, Florida, pursuant to Section 47.051,
Florida Statutes, because (a) Kuschner, Lopez, and Bastos reside in Miami-Dade County, Florida;
(b) the conduct alleged herein arises from a contract entered into in Miami-Dade County, Florida;
(c) the tortious activity alleged herein occurred in Miami-Dade County, Florida; and/or (d) the
causes of action arose in Miami-Dade County, Florida.
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GENERAL ALLEGATIONS
21. Foreign exchange trading, commonly referred to in the industry as “forex trading,”
involves the buying and selling of international currencies.
22. At all times relevant hereto, FXWinning claimed to be a legitimate online foreign
exchange brokerage.
23. FXWinning allowed clients to access and manage their FXWinning foreign
exchange trading accounts through FXWinning’s two websites: fxwinning.net and fxwinning.pro.
24. Defendant Merino had control of, managed, and/or approved the content that
appeared on the FXWinning websites. Thus, the representations that appeared on the FXWinning
websites were also Merino’s personal representations.
25. Both of FXWinning’s websites include links to the FXWinning Terms &
Conditions. The Terms & Conditions state that they constitute an agreement between FXWinning
and FXWinning clients that have completed the online registration form. A copy of the
FXWinning Terms & Conditions, with a certified English translation, is attached as Exhibit A.
26. According to Section 3.4 of the FXWinning Terms & Conditions,
Upon account activation, the Customer may view the amount due as an account
balance in MyFxWinning (the Company Online Portal) at any time and will be
entitled to withdraw the account upon request.
Ex. A, at pp. 3 (emphasis added).
27. According to Section 14.3 of the FXWinning Terms & Conditions, “[t]he Customer
may withdraw funds from the Trading Account at any time in accordance with clause 14.4.” Ex.
A, at pp. 14.
28. Section 14.4 states, in relevant part: “If the Customer gives an instruction to
withdraw funds from the Trading Account, The Company will pay the specified amount on the
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same day the withdrawal request was made, or the next business day if the Customer’s request
is received outside normal operating hours.” Ex. A, at pp. 14 (emphasis added).
29. Starting at least as early as 2021 and until at least after the filing of this lawsuit, via
its websites, FXWinning (and thus Merino as he controlled, managed, and/or approved of the
content of the websites) made several false statements of fact, including the following (with how
the statements were false):
a. FXWinning was a legitimate online foreign exchange brokerage. In fact,
FXWinning was not a legitimate online foreign exchange brokerage;
b. FXWinning had “a great team with abundant experience in the financial market,
crypto currencies, expert advisors, etc.” In fact, FXWinning did not have abundant
experience in the financial market and crypto currencies, and they were not expert
advisors.
c. FXWinning “defend[s] transparency and offer[s] the highest standards of security
and trust for our clients’ funds. This is why all funds are in segregated accounts
and completely separate from company funds.” In fact, FXWinning did not defend
transparency, was entirely non-transparent, and did not offer the highest standards
of security and trust for its clients’ funds. FXWinning was not secure or trustworthy
for investing funds.
d. FXWinning is “a safe and competent broker”. In fact, FXWinning was not a safe
or competent broker.
e. FXWinning “guaranteed” Plaintiffs, and others similarly situated, “the best spreads
and trading conditions,” specifically stating as follows:
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In fact, FXWinning did not guarantee the best spreads and trading conditions.
f. Promoting the security of clients’ funds, saying:
In fact, FXWinning did not contract Client Money Insurance on behalf of its
clients. Nor was it a member of a network of responsible global financial
service providers that offered additional layers of security.
g. FXWinning had the following liquidity providers:
In fact, none of those financial institutions were actually liquidity providers for
FXWinning.
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h. An FXWinning client could withdraw his/her funds from his account at any time in
accordance with clause 14.4 of the Terms and Conditions (this false statement of
fact appeared on both the websites and Section 14.3 of the Terms and Conditions).
Section 14.4 represented that “If the Customer gives an instruction to withdraw
funds from the Trading Account, the Company will pay the specified amount on
the same day the withdrawal request was made, or the next business day if the
Customer’s request is received outside normal operating hours.” Those
representations were false in that an FXWinning customer could not withdraw
his/her funds from his account at any time in accordance with clause 14.4 of the
Terms of Conditions (i.e., the same day or next business day).
The aforementioned false statements of facts are hereinafter referred to as “the Website
Misrepresentations.”
30. Prior to February 2022, FXWinning authorized Lopez, Kuschner, Merino, and
others to solicit clients that would engage in foreign exchange trading, as well as open accounts,
with FXWinning.
31. Prior to February 2022, Merino also authorized Lopez, Kuschner, and others to
speak on his individual behalf when soliciting potential FXWinning clients such as Plaintiffs.
Misrepresentations to Kerns & Kerns Capital
32. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez,
acting in their individual capacities and as agents of FXWinning and Merino, approached Kerns
about a new investment opportunity.
33. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez,
acting in their individual capacities and as agents of FXWinning and Merino, represented to Kerns
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that this new investment opportunity was centered around a proprietary algorithm developed by
Merino that could achieve high monthly returns on foreign exchange trades (“Misrepresentation
#1”).
34. To the contrary, FXWinning, Kuschner, Lopez, and Merino knew at the time
Misrepresentation #1 was made that (1) FXWinning did not have the liquidity providers listed on
FXWinning’s website, (2) FXWinning was nothing more than a fraudulent scheme to induce
potential traders to transfer money to FXWinning, (3) no high rate of return would be possible,
and (4) Plaintiffs would never receive a full withdrawal of their deposited money as they were
promised.
35. During a meeting in Miami-Dade County, Florida and/or via telephone, in or
around February 2022, Lopez, acting in his individual capacity and as agent of FXWinning and
Merino, stated that Merino was his “partner”.
36. Alternatively, in the event that Lopez and Merino were not actually partners, Lopez
and Merino are liable for each other’s acts pursuant to partnership by estoppel.
37. During the same meeting in or around February 2022 in Miami-Dade County,
Florida, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning
and Merino, showed Kerns their own FXWinning accounts that used the algorithm, which they
claimed were achieving rates of return of 8% to 15% each month.
38. At this meeting in February 2022, Kuschner and Lopez, acting in their individual
capacities and as agents of FXWinning and Merino, also informed Kerns that he could trade using
the algorithm by putting his money with FXWinning and accessing the FXWinning platform
through the FXWinning websites.
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39. In or around February 2022, via voice message to Kerns, Kuschner, in his
individual capacity and as agent of FXWinning and Merino, adopted the Website
Misrepresentations as his own in, and as, a representation to Kerns (“Kuschner-Kerns Website
Misrepresentations”).
40. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez,
acting in their individual capacities and as agents of FXWinning and Merino, represented to Kerns
that Kerns would always be able to withdraw his money from his FXWinning account if he wished
(“Misrepresentation #2”).
41. To the contrary, Kerns would not always be able to withdraw his money and
FXWinning was nothing more than a fraudulent scheme to induce potential traders to transfer
money to FXWinning.
42. In or around February 2022 in Miami-Dade County, Florida, Kuschner and Lopez,
acting in their individual capacities and as agents of FXWinning and Merino also represented to
Kerns that they had personally flown to Cyprus, to meet with Brito (FXWinning’s Chief Executive
Officer), to examine FXWinning’s system, and review FXWinning’s liquidity, and that, on that
trip, they had seen the liquidity bridge and how the deposits were made to FXWinning and then
directly on to the liquidity provider (“Misrepresentation #3”).
43. In truth, Kuschner and Lopez had done no such thing because, at minimum,
FXWinning did not actually have the liquidity providers it touted on its website.
44. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez,
acting in their individual capacities and as agents of FXWinning and Merino, represented to Kerns
that if anything were to ever go wrong with his investment, Kuschner and Lopez would either
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facilitate a process, or were aware of a surefire process, whereby Kerns could withdraw his funds
from FXWinning (“Misrepresentation #4”).
45. Yet, FXWinning, Merino, Kuschner, and Lopez had no intention of facilitating a
safe and easy process, nor were they aware of a surefire process, whereby Kerns could withdraw
his funds from FXWinning, and, in the end, they did not actually facilitate any such exit process.
46. In reliance on the Website Misrepresentations, the Kuschner-Kerns Website
Misrepresentations, and Misrepresentations #1 through #4, Kerns opened an account with
FXWinning in his own name (the “Kerns Account”) in or about January 2022.
47. In reliance on the Website Misrepresentations, the Kuschner-Kerns Website
Misrepresentations, and Misrepresentations #1 through #4, Kerns deposited more than $3 million
into the Kerns Account between February 23, 2022, and January 2023.
48. FXWinning, Merino, Kuschner, and Lopez intended that (a) their representations
to Kerns reach all of Kerns’s affiliates, including any corporate entity Kerns subsequently created
or managed, and (b) all of Kerns’s affiliates, including any corporate entity Kerns subsequently
created or managed, rely on FXWinning, Merino, Kuschner, and Lopez’s representations.
49. FXWinning, Kuschner, Lopez, and Merino were all aware that their representations
to Kerns would be relied upon by all of Kerns’s affiliates, including any corporate entity Kerns
subsequently created or managed.
50. FXWinning, Kuschner, Lopez, and Merino had reason to expect that Kerns would
communicate their misrepresentations to his affiliates, including any corporate entity Kerns
subsequently created or managed, and that their misrepresentations would influence those
affiliates.
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51. In or around June 2022, Kerns created Kerns Capital, a hedge fund that Kerns
manages. Lopez, in his individual capacity and as agent for FXWinning and Merino, discussed
the creation of Kerns Capital with Kerns prior to its creation and facilitated Kerns Capital’s use of
FXWinning’s trading platform.
52. Kerns did communicate the above-alleged representations to Kerns Capital.
53. In reliance on the Website Misrepresentations, the Kuschner-Kerns Website
Misrepresentations, and Misrepresentations #1 through #4, Kerns Capital deposited more than $6.2
million into an account on the FXWinning website (the “Kerns Capital Account”) between July
1, 2022, and January 31, 2023.
54. On June 30, 2022, at 9:43 p.m., Lopez, in his individual capacity and as agent of
FXWinning and Merino, introduced Kerns and Kerns Capital to an FXWinning representative
named Selena, by way of a WhatsApp group chat he titled “Fxwinning wires (ck).” Through a
voice note sent via the WhatsApp group chat, Lopez stated the following to Kerns:
Cody this is Selena, Selena works hands on with Rafa [Brito], the
owner of the broker, David [Merino], and myself, um, on a back-
end with everything that has to do with the system, brokering, and
so on and so on. Anytime you send a wire just send it here, uh, if it’s
a big wire just let her know at least one or two hours before, so we’re
able to get it done. You’re capped at one hundred million dollars,
but if you’re making one hundred-million-dollar wires, I’ll salute to
you my brother. And yea, we’ll go from here. You have efficiency,
anything you need on the back-end, she also helps me with
everything, as well as David and Rafa.
Misrepresentations to McGinnis
55. Meanwhile, in or about June 2022, McGinnis met Kuschner at a dinner with Kerns
in Miami-Dade County, Florida.
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56. After that dinner, Kuschner, in his individual capacity and as an agent of
FXWinning and Merino, began soliciting McGinnis to begin trading in foreign currency through
FXWinning.
57. On or about July 4, 2022, in a telephone conversation, Kuschner, in his individual
capacity and as an agent of FXWinning and Merino, represented to McGinnis that:
a. Kuschner and Lopez had fully vetted FXWinning (“Misrepresentation #5);
b. Lopez and Kuschner personally flew out to meet and vet the broker and the liquidity
provider (“Misrepresentation #6”);
c. Lopez and Kuschner saw the actual funds held by FXWinning
(“Misrepresentation #7”); and
d. FXWinning was appropriately liquidated (“Misrepresentation #8”).
58. Misrepresentation #5 was false in that Kuschner and Lopez had not fully vetted
FXWinning.
59. Misrepresentation #6 was false in that Kuschner and Lopez had not vetted the
broker or any liquidity provider – especially because FXWinning did not have the liquidity
providers touted on FXWinning’s website.
60. Misrepresentation #7 was false because neither Kuschner nor Lopez had seen the
actual funds held by FXWinning.
61. Misrepresentation #8 was false because FXWinning was not appropriately
liquidated, much less with the liquidity providers it touted on FXWinning’s website.
62. From July 7, 2022, during an in-person meeting in Miami-Dade County, Florida,
until approximately April 2023 in both in-person and telephone calls, Lopez, in his individual
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capacity and as agent of FXWinning and Merino, repeatedly represented to McGinnis that Lopez
and Merino were partners and partners in FXWinning.
63. Alternatively, in the event that Lopez and Merino were not actually partners and/or
partners in FXWinning, Lopez and Merino are liable for each other’s acts pursuant to partnership
by estoppel.
64. Kuschner invited McGinnis over to his apartment in Miami to meet with Kuschner
and Lopez on or around July 7, 2022. During that meeting, Lopez showed McGinnis what Lopez
represented as Lopez’s FXWinning account, with $21 million in it. Kuschner showed McGinnis
what Kuschner represented as Kuschner’s account, with between $5 million and $6 million in it.
Lopez and Kuschner also showed McGinnis an account at FXWinning and stated that it belonged
to someone in the royal family in Dubai with hundreds of millions of dollars in it. Lopez and
Kuschner also discussed a Swiss hedge fund that Merino brought to FXWinning, which traded
approximately $650 million.
65. During the July 7, 2022 meeting at Kuschner’s apartment, Kuschner and Lopez,
acting in their individual capacities and as agents of FXWinning and Merino, showed McGinnis
the FXWinning websites and adopted the Website Misrepresentations as their own in, and as,
representations to McGinnis (the “Kuschner/Lopez-McGinnis Website Misrepresentations”).
66. Lopez and Kuschner, in their individual capacities and as agents of FXWinning and
Merino, touted the values of their accounts, as well as the gaudy amounts found in the accounts
belonging to others, in order to induce McGinnis into investing in FXWinning through them.
67. On July 7, 2022, in reliance on the Website Misrepresentations, the
Kuschner/Lopez-McGinnis Website Misrepresentations, and Misrepresentations #5 through #8,
McGinnis opened an FXWinning account in his name (the “McGinnis Account”).
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68. Between July 7, 2022, and July 12, 2022, in reliance on the Website
Misrepresentations, the Kuschner/Lopez-McGinnis Website Misrepresentations, and
Misrepresentations #5 through #8, McGinnis deposited $495,000 into the McGinnis Account.
69. In the midst of McGinnis’s first deposits, on or about July 11, 2022, Kuschner, in
his individual capacity and as an agent of FXWinning and Merino, represented to McGinnis via a
voice note, that if McGinnis wanted Merino to take him seriously in an upcoming phone call
between them, McGinnis would need to deposit more funds and have his account at FXWinning
reach over $1 million as soon as possible (“Misrepresentation #9”).
70. In fact, Merino was not taking such a position because FXWinning was all an
unserious, fraudulent scheme.
71. In reliance on Misrepresentation #9 and the represented urgency for the increase,
McGinnis deposited additional funds, bringing the McGinnis Account to over $1 million soon
thereafter.
FXWinning and its Agents Push for More Deposits from Plaintiffs
72. In or about April/May 2022, Lopez, in his individual capacity and as an agent of
FXWinning and Merino, sent Kerns a message via Instagram teasing another, new opportunity on
the horizon:
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73. Plaintiffs later learned that this new opportunity was an FXWinning account for
VIP clients that Bastos managed and controlled.
74. In or about September 2022, after Plaintiffs’ initial rounds of deposits, Kuschner
and Lopez, in their individual capacities and as agents of FXWinning and Merino, gave Plaintiffs
the details of that new opportunity that Lopez had teased a few months before. It was a VIP Multi-
Account Manager (“VIP MAM”) account on FXWinning that would allegedly generate even
higher returns for Plaintiffs.
75. On or about December 19, 2022, Kerns and Kerns Capital asked Kuschner what
the required minimum deposit was for the Kerns Account and Kerns Capital Account to be VIP
MAM accounts and earn higher returns from FXWinning. That same day, Kuschner, in his
individual capacity and as agent of FXWinning and Merino, told Kerns and Kerns Capital via text
message that he believed it was $3.5 million, but that Kerns/Kerns Capital should ask Lopez.
Kuschner, in his individual capacity and as agent of FXWinning and Merino, also told Kerns and
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Kerns Capital that Merino was increasing the minimum limit for 2023, the new year. That same
day, Kuschner, in his individual capacity and as agent of FXWinning and Merino, also said via
text message that “Morton was asking if [Merino] could get him in [to the VIP MAM] with 2.3
[million dollars]” but Merino “[s]aid ‘no get more $’”:
76. Following Kuschner’s suggestion, Kerns and Kerns Capital reached out to Lopez
via text message and asked him what the minimum deposit for a VIP MAM was. Lopez, in his
individual capacity and as agent of FXWinning and Merino, responded via text message by saying
Kerns and Kerns Capital needed to deposit a minimum of $3.5 million by the end of 2022 and,
after that, the minimum would be increasing, again, to $4.5 million or $5 million by around January
10, 2023 (which he later in the text conversation corrected to $5 million by January 1, 2023). Thus,
on or about December 19, 2022, via text message, both Kuschner and Lopez, in their individual
capacities and as agents of FXWinning and Merino, told Kerns and Kerns Capital that they needed
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to deposit a minimum of $3.5 million by the end of 2022 to be eligible for the VIP MAM
(“Misrepresentation #10”). Lopez, in his individual capacity and as agent of FXWinning and
Merino, also told Kerns and Kerns Capital on December 19, 2022, via text message, that there was
a “huge line” of investors waiting to join the VIP group (“Misrepresentation #11”):
77. Misrepresentation #10 was false because there was no actual required minimum
deposit in light of FXWinning’s being a fraudulent scheme.
78. Misrepresentation #11 was false because there was not a “huge line” of investors
waiting and the VIP MAM was simply another maneuver by which FXWinning perpetrated its
fraudulent scheme to convince investors to transfer money to FXWinning.
79. In reliance on Misrepresentations #10 and #11, and believing time was of the
essence, Kerns avoided making withdrawals from the Kerns Account at a time that withdrawals
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were still possible, which withdrawals he would have otherwise made, so that the Kerns Account
had the minimum amount for the VIP MAM.
80. For his part, FXWinning moved McGinnis to the VIP MAM without his knowledge
or consent.
81. In or around December 2022, Kuschner and Lopez, acting in their individual
capacities and as agents of FXWinning and Merino, represented to McGinnis in person and/or via
telephone calls that he had to maintain a balance of approximately $4 million to stay in the VIP
MAM, with the minimum balance probably going up to $5 million soon (“Misrepresentation
#12”).
82. Misrepresentation #12 was false in that there was no actual minimum balance to
stay in the VIP MAM.
83. In reliance on Misrepresentation #12, McGinnis avoided making withdrawals that
he would have otherwise made in order to maintain an account balance of at least $4 million.
Given what was to happen soon, McGinnis never got the chance to make those withdrawals.
84. Incredibly, upon information and belief, at or around the time Kuschner and Lopez
(acting in their individual capacities and as agents of FXWinning and Merino) were convincing
Kerns and McGinnis to quickly deposit more money into the VIP MAMs and/or to maintain their
balances at the status quo, Kuschner and Lopez were making large withdrawals – totaling millions
of dollars – from their own FXWinning accounts, including but not limited to, a multi-million
dollar withdrawal Lopez made shortly before December 9, 2022.
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Kuschner, Lopez, Merino, and Bastos Earned Huge Commissions Directly From Plaintiffs’
Accounts
85. Once per month, Kushner, Lopez, Bastos, and Merino pulled out 35-50%
commissions directly from the Kerns Account, the Kerns Capital Account, and the McGinnis
Account, and thereafter divided those commissions amongst themselves.
86. Upon information and belief, Bastos had instructed Kuschner and Lopez to not
advise Plaintiffs that Bastos was involved in the operation of the VIP MAM, or that he was
receiving commissions directly from Plaintiffs’ accounts, so that he could stay hidden from
Plaintiffs’ view.
87. Upon information and belief, Bastos received approximately $80 million to $90
million in commissions through the scheme Defendants perpetrated against FXWinning clients,
including, as mentioned, from commissions Bastos received directly from Plaintiffs’ accounts.
88. Upon information and belief, Brito – as CEO and/or co-owner of FXWinning –
received a portion of the profits from the scheme perpetrated against Plaintiffs. In other words, he
obtained a portion of the principal that Plaintiffs deposited into their FXWinning accounts, which
Brito obtained directly from Plaintiffs’ accounts.
89. Upon information and belief, Lopez earned more than $1.1 million per month in
commissions from people he solicited to trade through FXWinning, including the commissions
Lopez received directly from Plaintiffs’ accounts.
FXWinning Claims to be Under a Know Your Customer/Anti-Money Laundering Audit
90. In early 2023, FXWinning told Plaintiffs through FXWinning’s public newsletter
that FXWinning was undergoing a Know Your Customer/Anti-Money Laundering
(“KYC/AML”) audit.
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91. In early 2023, Lopez also advised Kerns via text message that the liquidity
providers were conducting the audit, and that Brito submitted to the liquidity providers all of the
documents that the liquidity providers’ compliance teams had requested.
92. Upon information and belief, at that time, FXWinning was managing roughly $5
billion in investments.
93. In or around March 2023, Kuschner and Lopez, in their individual capacities and
as agents of FXWinning and Merino, represented to Kerns and Kerns Capital that Kuschner and
Lopez were flying to Dubai to meet with Merino and Brito in person to review the company’s
situation in light of the KYC/AML audit.
94. In or around March 2023, Kuschner and Lopez, in their individual capacities and
as agents of FXWinning and Merino, represented to Kerns and Kerns Capital that they met with
Merino and Brito and saw $3 billion in FXWinning liquidity with their own eyes. Kuschner and
Lopez also represented that Kerns and Kerns Capital’s money was safe.
95. Kerns and Kerns Capital also met in person with Kuschner, Lopez, and Merino at
Lopez’s home in Miami, Florida, in or around March 2023. During that meeting, Merino told
Kerns and Kerns Capital that the Kerns Account and the Kerns Capital Account were safe, and
that all money would be released and paid.
96. On or about April 25, 2023, Merino told Kerns and Kerns Capital that Merino
would personally pay out both of their accounts if the KYC/AML audit was not resolved by June
2023.
97. As part of the KYC/AML audit, FXWinning asked Plaintiffs for large amounts of
personal information, as well as information related to the hedge fund and Kerns Capital, in order
to complete the KYC/AML audit.
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98. FXWinning and Merino also informed Plaintiffs that they were prohibited from
withdrawing from their accounts during the audit.
99. On or about June 6, 2023, FXWinning advised Kerns Capital that Kerns Capital
had completed and passed the KYC/AML process.
100. On June 11, 2023, FXWinning advised Kerns that Kerns had completed and passed
the KYC/AML process.
101. On or about June 13, 2023, FXWinning informed Kerns Capital via email that a
previously requested withdrawal would be processed from the Kerns Capital Account.
102. On June 21, 2023, FXWinning posted to its website, in relevant part, the following
notice:
Therefore, FXWinning caused Kerns and Kerns Capital to believe that there were minor delays
due to a high demand of requests and that Kerns and Kerns Capital would receive their funds on
or about July 7, 2023.
103. On June 6, 2023, FXWinning advised McGinnis that he had completed and passed
the KYC/AML process.
104. Shortly thereafter, FXWinning advised McGinnis that his withdrawal of the entire
balance in the McGinnis Account would be processed within 15 business days.
FXWinning Shuts Down and Prevents Plaintiffs From Obtaining Their Funds
105. On June 20, 2023, FXWinning posted the following message on its website:
Important Notice: FxWinning Limited regrets to inform you that due to unforeseen
circumstances, our services will cease on Thursday, 22.06.2023. Please close all
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open trades before Wednesday 21.06.2023 13:00 GMT+3 to avoid possible
problems. Kindly withdraw your remaining funds promptly, and our team will
assist you in the process. Withdrawals will be available until Friday 30.06.2023.
We apologize for any inconvenience caused and appreciate your understanding
during this challenging time.
106. Contrary to FXWinning’s representation, FXWinning never processed Plaintiffs’
withdrawal attempts.
107. Moreover, Plaintiffs have repeatedly demanded that their funds be returned. To
date, Defendants have failed to return any of Plaintiffs’ money.
108. On or about June 28, 2023, Brito represented to Kerns and Kerns Capital, via text
message, that Kerns and Kerns Capital would receive their money. Brito then blocked them so
that Kerns and Kerns Capital could not text him anymore.
109. Despite the campaign of promises, reassurances, and commitments to release funds
promulgated by FXWinning, Kuschner, Lopez, Merino, and Brito, with the assistance of Bastos
behind the scenes, none of the Plaintiffs ever received any of their withdrawals. Indeed, none of
them ever saw their money again.
110. At the time of filing this lawsuit, Defendants have taken approximately $6 million
from the Kerns Account.
111. At the time of filing this lawsuit, Defendants have taken approximately $12.7
million from the Kerns Capital Account.
112. At the time of the filing of this lawsuit, Defendants have taken approximately $9.7
million from the McGinnis Account.
113. Since the inception of FXWinning and Defendants’ relationship with Plaintiffs,
Defendants all knew or should have known that (1) FXWinning did not have the liquidity providers
FXWinning touted on its website, (2) FXWinning was nothing more than a fraudulent scheme to
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induce potential traders to transfer money to FXWinning; (3) no high rate of return would be
possible; and (4) Plaintiffs would never receive a full withdrawal of their deposited money as they
were promised.
Kuschner, Lopez, and Merino were FXWinning’s Agents; Lopez and Kuschner were Merino’s
Agents
114. At all material times, as shown above, Kuschner, Lopez, and Merino were agents
of FXWinning.
115. In particular, as alleged above, prior to February 2022, FXWinning authorized
Kuschner, Lopez, Merino, and others to solicit clients that would engage in foreign exchange
trading, as well as open accounts, with FXWinning.
116. Through that express authorization, FXWinning acknowledged that Kuschner,
Lopez, Merino, and others would act for it.
117. Kuschner, Lopez, Merino, and others accepted that undertaking when they
proceeded to solicit clients such as Plaintiffs in the manner aforesaid.
118. FXWinning had control over the actions of Kuschner, Lopez, Merino, and others
in that, at minimum, it created and oversaw the marketing and advertising pitch for the agents to
use to solicit clients such as Plaintiffs.
119. Prior to February 2022, as alleged above, Merino also authorized Kuschner, Lopez
and others to speak on his individual behalf when soliciting potential FXWinning clients such as
Plaintiffs.
120. Through that express authorization, Merino acknowledged that Kuschner and
Lopez would act for him.
121. Kuschner and Lopez accepted that undertaking when they proceeded to solicit
clients such as Plaintiffs in the manner aforesaid.
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122. Merino had control over the actions of Kuschner and Lopez in that Kuschner and
Lopez reported to Merino and would need his approval to engage in the various solicitation
activities.
123. To this end, in a text message on April 25, 2023, Merino, both individually and as
an FXWinning owner, confirmed to Kerns and Kerns Capital that he and Lopez were working
together on FXWinning.
124. In or around August 2022, McGinnis participated in a Zoom call with Lopez and
Merino, both individually and as an FXWinning owner, in which McGinnis discussed FXWinning
with Lopez and Merino.
125. Furthermore, on at least one occasion, Merino, individually and on behalf of
FXWinning, joined Kuschner and Lopez at an in-person meeting with Plaintiffs Kerns and Kerns
Capital. That meeting, which occurred at Lopez’s home, involved a discussion about Kerns and
Kerns Capital’s accounts with FXWinning.
126. Merino, both individually and as an FXWinning owner, never disavowed Kuschner
and Lopez’s speaking on his or FXWinning’s behalf.
127. As outlined above, FXWinning and Merino represented to Plaintiffs that Kuschner
and Lopez were speaking on FXWinning and Merino’s behalf.
128. Plaintiffs relied on FXWinning and Merino’s representation to Plaintiffs that
Kuschner and Lopez were working on their behalf, and Plaintiffs changed their position in reliance
on that representation, when Plaintiffs deposited money into their FXWinning accounts, added
money to their FXWinning accounts, and/or avoiding making withdrawals from their FXWinning
accounts at a time when making withdrawals was still possible.
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129. All conditions precedent to the filing of this action have been met, satisfied, or
otherwise waived.
130. Plaintiffs have retained the undersigned law firm and are obligated to pay
reasonable attorney’s fees and costs.
COUNT 1 – COMMON LAW FRAUD
(Kerns against FXWinning)
131. Kerns re-alleges and incorporates through reference paragraphs 1 through 130 as if
set forth fully herein.
132. FXWinning made false statements of fact to Kerns, including FXWinning’s
Website Misrepresentations, FXWinning’s Kuschner-Kerns Website Misrepresentations, and
FXWinning’s Misrepresentations #1 through #4, #10, and #11, as alleged above. Those statements
were false for the reasons alleged in paragraphs 29, 34, 41, 43, 45, 77, and 78 above.
133. In reliance on FXWinning’s Website Misrepresentations, FXWinning’s Kuschner-
Kerns Website Misrepresentations, and FXWinning’s Misrepresentations #1 through #4, Kerns
opened the Kerns Account in or about January 2022 and deposited more than $3 million into the
Kerns Account between February 23, 2022 and January 2023.
134. In reliance on FXWinning’s Misrepresentations #10 and #11, and believing time
was of the essence, Kerns avoided withdrawing funds from the Kerns Account at a time that
withdrawals were still possible, which withdrawals he would have otherwise made, so that the
Kerns Account had the minimum amount for the VIP MAM.
135. FXWinning knew that the aforementioned representations were false when it made
them to Kerns. Since the inception of FXWinning’s relationship with Kerns, FXWinning knew
that (1) FXWinning did not have the liquidity providers it touted on FXWinning’s website; (2) it
was nothing more than a fraudulent scheme to induce potential traders to transfer money to
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FXWinning; (3) no high rate of return would be possible or occur; (4) Kerns would never receive
a full withdrawal of his deposited money as he was promised; and (5) the VIP MAM was just
another ruse to convince traders to transfer more money to FXWinning.
136. FXWinning never intended to comply with, or fulfill, its representations when it
made them to Kerns.
137. FXWinning made the representations to Kerns for the purpose of inducing Kerns
to act in reliance thereon.
138. Kerns did, in fact, rely on the truthfulness of FXWinning’s representations when
he deposited money with FXWinning, and/or increased the value of his account with FXWinning
in the manner outlined above, and/or did not withdraw the value of his account at a time when
FXWinning was allowing withdraws to be processed (that is, on or before January 2023).
139. As a result of FXWinning’s conduct, Kerns has been damaged. That damage
includes, but is not limited to, the loss of his funds deposited in FXWinning.
WHEREFORE, Plaintiff Kerns demands judgment against Defendant FXWinning for
damages, costs, interest as allowed by law, and such further relief this Court deems just and proper.
COUNT 2– COMMON LAW FRAUD
(Kerns Capital against FXWinning)
140. Kerns Capital re-alleges and incorporates through reference paragraphs 1 through
130 as if set forth fully herein.
141. FXWinning made false statements of fact to Kerns Capital, including FXWinning’s
Website Misrepresentations, FXWinning’s Kuschner-Kerns Website Misrepresentations, and
FXWinning’s Misrepresentations #1 through #4, as alleged above. Those statements were false
for the reasons alleged in paragraphs 29, 34, 41, 43, and 45 above.
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142. In reliance on FXWinning’s Website Misrepresentations, FXWinning’s Kuschner-
Kerns Website Misrepresentations, and FXWinning’s Misrepresentations #1 through #4, Kerns
Capital opened the Kerns Capital Account and deposited more than $6.2 million into the Kerns
Capital Account between July 1, 2022 and January 31, 2023.
143. FXWinning knew that the aforementioned representations were false when it made
them to Kerns Capital. Since the inception of FXWinning’s relationship with Kerns Capital,
FXWinning knew that (1) FXWinning did not have the liquidity providers it touted on
FXWinning’s website; (2) it was nothing more than a fraudulent scheme to induce potential traders
to transfer money to FXWinning; (3) no high rate of return would be possible or occur; and (4)
Kerns Capital would never receive a full withdrawal of its deposited money as it was promised.
144. FXWinning never intended to comply with, or fulfill, its representations when it
made them to Kerns Capital.
145. FXWinning made the representations to Kerns Capital for the purpose of inducing
Kerns Capital to act in reliance thereon.
146. Kerns Capital did, in fact, rely on the truthfulness of FXWinning’s representations
when it deposited money with FXWinning, and/or increased the value of its account with
FXWinning in the manner outlined above, and/or did not withdraw the value of its account at a
time when FXWinning was allowing withdraws to be proce
Preview
Filing # 185189258 E-Filed 10/31/2023 07:00:01 PM IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA CIRCUIT CIVIL DIVISION CASE NO.: 2023-020202-CA-01 CODY KERNS, et al., Plaintiffs, v. FXWINNING, LTD., et al., Defendants. / AMENDED COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiffs, Cody Kerns (“Kerns”), Kerns Capital Management, Inc. (“Kerns Capital”), and WFTMB Holdings LLC (“WFTMB”) as assignee of Christopher McGinnis (“McGinnis”) (collectively, “Plaintiffs”), file their Amended Complaint and Demand for Jury Trial against Defendants, FxWinning, Ltd. (“FXWinning”), Jonathan Lopez (“Lopez”), Julian Kuschner (“Kuschner”), David Merino (“Merino”), Renan da Rocha Gomes Bastos (“Bastos”), Rafael Brito Cutie (“Brito”) and BBRC Real Estate, LLC (“BBRC”) (FXWinning, Lopez, Kuschner, Merino, Bastos, and Brito are collectively referred to at times as, “Defendants”), and allege: THE PARTIES 1. This is an action for damages in an amount greater than $750,000.00, exclusive of interest and costs, and is within the jurisdiction of this Court. 2. Plaintiff Kerns is a resident of Boca Raton, Florida, and is otherwise sui juris. 3. Plaintiff Kerns Capital Management, Inc. is a British Virgin Islands Corporation with its principal place of business in Tortola, British Virgin Islands. 4. Plaintiff WFTMB is a Florida Limited Liability Company with its principal place of business in Weston, Florida. It is the assignee of McGinnis based on a certain assignment agreement between McGinnis and WFTMB whereby McGinnis assigned to WFTMB all claims or causes of action that he has or may have against Defendants arising out of McGinnis’s investments in and use of FXWinning, Ltd.’s foreign currency exchange platform. 5. Defendant FXWinning is a Hong Kong Limited Company with its principal place of business at Unit 1411, 14/Floor, Cosco Tower, 183 Queen's Road Central, Sheung Wan, Hong Kong. Upon information and belief, FXWinning also has offices in Dubai, Cyprus, and Miami- Dade County, Florida. 6. Defendant Lopez is an individual who resides in Miami, Florida, and at all times relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris. 7. Defendant Kuschner is an individual who resides in Miami, Florida, and at all times relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris. 8. Defendant Merino is an individual who resides in Spain and, and at all times relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris. Upon information and belief, at all times relevant hereto, Merino was a founder and owner of FXWinning. He is also the founder and owner of Merino Capital Solutions, Inc., a Florida corporation with its principal place of business in Miami-Dade County, Florida. 9. Defendant Bastos is, upon information and belief, an individual who resides in Miami-Dade, County, Florida, and at all times relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris. Upon information and belief, at all times relevant hereto, Bastos served as the de facto principal operations manager for FXWinning in the United States. 2 10. Defendant Brito is an individual who, upon information and belief, resides in the United Arab Emirates and/or Cyprus, and at all times relevant hereto, conducted business in Miami-Dade County, Florida, and is otherwise sui juris. At all times relevant hereto, Brito served as the Chief Executive Officer of FXWinning and was a co-owner of FXWinning with Merino. 11. Defendant BBRC is a Florida Limited Liability Company with its principal place of business in Orlando, Florida. JURISDICTION AND VENUE 12. Personal jurisdiction over FXWinning is proper pursuant to Section 48.193(2), Florida Statutes, because FXWinning engages in substantial and not isolated activity within Florida. 13. Personal jurisdiction over FXWinning is also proper pursuant to: a. Section 48.193(1)(a)(1), Florida Statutes, because it personally, or through its agents, operates, conducts, engages in, or carries on a business or business venture in this state; b. Section 48.193(1)(a)(2), Florida Statutes, because it personally, or through its agents, committed a tortious act within this state; c. Section 48.193(1)(a)(6)(a), Florida Statutes, because it caused injury to persons or property within this state arising out of an act or omission made by FXWinning outside this state while FXWinning was engaging in solicitation or service activities within Florida; and d. Section 48.193(1)(a)(7), Florida Statutes, because it breached a contract in Florida by failing to perform acts required by the contract to be performed in Florida. 3 14. Personal jurisdiction over Merino is proper pursuant to Section 48.193(2), Florida Statutes, because Merino engages in substantial and not isolated activity within Florida. 15. Personal jurisdiction over Merino is also proper pursuant to: a. Section 48.193(1)(a)(1), Florida Statutes, because he personally, or through his agents, operates, conducts, engages in, or carries on a business or business venture in this state; b. Section 48.193(1)(a)(2), Florida Statutes, because he personally, or through his agents, committed a tortious act within this state; and c. Section 48.193(1)(a)(6), Florida Statutes, because he caused injury to persons or property within this state arising out of an act or omission made by Merino outside this state while he was engaging in solicitation or service activities within Florida. 16. Personal jurisdiction over Brito is proper pursuant to Section 48.193(2), Florida Statutes, because Brito engages in substantial and not isolated activity within Florida. 17. Personal jurisdiction over Brito is also proper pursuant to: a. Section 48.193(1)(a)(1), Florida Statutes, because he personally, or through his agents, operates, conducts, engages in, or carries on a business or business venture in this state; b. Section 48.193(1)(a)(2), Florida Statutes, because he personally, or through his agents, committed a tortious act within this state; and c. Section 48.193(1)(a)(6), Florida Statutes, because he caused injury to persons or property within this state arising out of an act or omission made by Brito outside this state while he was engaging in solicitation or service activities within Florida. 4 18. This Court also has personal jurisdiction over Merino and Brito because they entered into a conspiracy with Lopez, Kuschner, and Bastos to commit fraud against Plaintiffs in Florida by, among other things, making misrepresentations to Plaintiffs such that Plaintiffs would deposit money into, and/or withhold withdrawing money from, accounts at FXWinning, while the conspirators knew that FXWinning was nothing more than a fraudulent scheme to induce investors to transfer money to FXWinning, that FXWinning did not have the liquidity providers touted on FXWinning’s website, that Plaintiffs would not receive a high rate of return, and that Plaintiffs would never receive a full withdrawal of their deposited money as they were promised. That conspiracy allowed the conspirators to receive commissions or the profits from the scheme directly from Plaintiffs’ FXWinning accounts. Moreover, overt acts in furtherance of the conspiracy were committed in Florida in that Kuschner and Lopez, in their individual capacities, and as agents of Merino, made misrepresentations in furtherance of the conspiracy in Florida and Kuschner, Lopez, and Merino met with Kerns and Kerns Capital in Miami, Florida. 19. Based on the foregoing conduct, the exercise of personal jurisdiction over Defendants satisfies traditional notions of fair play and substantial justice under the Fourteenth Amendment of the United States Constitution. 20. Venue is proper in Miami-Dade County, Florida, pursuant to Section 47.051, Florida Statutes, because (a) Kuschner, Lopez, and Bastos reside in Miami-Dade County, Florida; (b) the conduct alleged herein arises from a contract entered into in Miami-Dade County, Florida; (c) the tortious activity alleged herein occurred in Miami-Dade County, Florida; and/or (d) the causes of action arose in Miami-Dade County, Florida. 5 GENERAL ALLEGATIONS 21. Foreign exchange trading, commonly referred to in the industry as “forex trading,” involves the buying and selling of international currencies. 22. At all times relevant hereto, FXWinning claimed to be a legitimate online foreign exchange brokerage. 23. FXWinning allowed clients to access and manage their FXWinning foreign exchange trading accounts through FXWinning’s two websites: fxwinning.net and fxwinning.pro. 24. Defendant Merino had control of, managed, and/or approved the content that appeared on the FXWinning websites. Thus, the representations that appeared on the FXWinning websites were also Merino’s personal representations. 25. Both of FXWinning’s websites include links to the FXWinning Terms & Conditions. The Terms & Conditions state that they constitute an agreement between FXWinning and FXWinning clients that have completed the online registration form. A copy of the FXWinning Terms & Conditions, with a certified English translation, is attached as Exhibit A. 26. According to Section 3.4 of the FXWinning Terms & Conditions, Upon account activation, the Customer may view the amount due as an account balance in MyFxWinning (the Company Online Portal) at any time and will be entitled to withdraw the account upon request. Ex. A, at pp. 3 (emphasis added). 27. According to Section 14.3 of the FXWinning Terms & Conditions, “[t]he Customer may withdraw funds from the Trading Account at any time in accordance with clause 14.4.” Ex. A, at pp. 14. 28. Section 14.4 states, in relevant part: “If the Customer gives an instruction to withdraw funds from the Trading Account, The Company will pay the specified amount on the 6 same day the withdrawal request was made, or the next business day if the Customer’s request is received outside normal operating hours.” Ex. A, at pp. 14 (emphasis added). 29. Starting at least as early as 2021 and until at least after the filing of this lawsuit, via its websites, FXWinning (and thus Merino as he controlled, managed, and/or approved of the content of the websites) made several false statements of fact, including the following (with how the statements were false): a. FXWinning was a legitimate online foreign exchange brokerage. In fact, FXWinning was not a legitimate online foreign exchange brokerage; b. FXWinning had “a great team with abundant experience in the financial market, crypto currencies, expert advisors, etc.” In fact, FXWinning did not have abundant experience in the financial market and crypto currencies, and they were not expert advisors. c. FXWinning “defend[s] transparency and offer[s] the highest standards of security and trust for our clients’ funds. This is why all funds are in segregated accounts and completely separate from company funds.” In fact, FXWinning did not defend transparency, was entirely non-transparent, and did not offer the highest standards of security and trust for its clients’ funds. FXWinning was not secure or trustworthy for investing funds. d. FXWinning is “a safe and competent broker”. In fact, FXWinning was not a safe or competent broker. e. FXWinning “guaranteed” Plaintiffs, and others similarly situated, “the best spreads and trading conditions,” specifically stating as follows: 7 In fact, FXWinning did not guarantee the best spreads and trading conditions. f. Promoting the security of clients’ funds, saying: In fact, FXWinning did not contract Client Money Insurance on behalf of its clients. Nor was it a member of a network of responsible global financial service providers that offered additional layers of security. g. FXWinning had the following liquidity providers: In fact, none of those financial institutions were actually liquidity providers for FXWinning. 8 h. An FXWinning client could withdraw his/her funds from his account at any time in accordance with clause 14.4 of the Terms and Conditions (this false statement of fact appeared on both the websites and Section 14.3 of the Terms and Conditions). Section 14.4 represented that “If the Customer gives an instruction to withdraw funds from the Trading Account, the Company will pay the specified amount on the same day the withdrawal request was made, or the next business day if the Customer’s request is received outside normal operating hours.” Those representations were false in that an FXWinning customer could not withdraw his/her funds from his account at any time in accordance with clause 14.4 of the Terms of Conditions (i.e., the same day or next business day). The aforementioned false statements of facts are hereinafter referred to as “the Website Misrepresentations.” 30. Prior to February 2022, FXWinning authorized Lopez, Kuschner, Merino, and others to solicit clients that would engage in foreign exchange trading, as well as open accounts, with FXWinning. 31. Prior to February 2022, Merino also authorized Lopez, Kuschner, and others to speak on his individual behalf when soliciting potential FXWinning clients such as Plaintiffs. Misrepresentations to Kerns & Kerns Capital 32. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, approached Kerns about a new investment opportunity. 33. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, represented to Kerns 9 that this new investment opportunity was centered around a proprietary algorithm developed by Merino that could achieve high monthly returns on foreign exchange trades (“Misrepresentation #1”). 34. To the contrary, FXWinning, Kuschner, Lopez, and Merino knew at the time Misrepresentation #1 was made that (1) FXWinning did not have the liquidity providers listed on FXWinning’s website, (2) FXWinning was nothing more than a fraudulent scheme to induce potential traders to transfer money to FXWinning, (3) no high rate of return would be possible, and (4) Plaintiffs would never receive a full withdrawal of their deposited money as they were promised. 35. During a meeting in Miami-Dade County, Florida and/or via telephone, in or around February 2022, Lopez, acting in his individual capacity and as agent of FXWinning and Merino, stated that Merino was his “partner”. 36. Alternatively, in the event that Lopez and Merino were not actually partners, Lopez and Merino are liable for each other’s acts pursuant to partnership by estoppel. 37. During the same meeting in or around February 2022 in Miami-Dade County, Florida, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, showed Kerns their own FXWinning accounts that used the algorithm, which they claimed were achieving rates of return of 8% to 15% each month. 38. At this meeting in February 2022, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, also informed Kerns that he could trade using the algorithm by putting his money with FXWinning and accessing the FXWinning platform through the FXWinning websites. 10 39. In or around February 2022, via voice message to Kerns, Kuschner, in his individual capacity and as agent of FXWinning and Merino, adopted the Website Misrepresentations as his own in, and as, a representation to Kerns (“Kuschner-Kerns Website Misrepresentations”). 40. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, represented to Kerns that Kerns would always be able to withdraw his money from his FXWinning account if he wished (“Misrepresentation #2”). 41. To the contrary, Kerns would not always be able to withdraw his money and FXWinning was nothing more than a fraudulent scheme to induce potential traders to transfer money to FXWinning. 42. In or around February 2022 in Miami-Dade County, Florida, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino also represented to Kerns that they had personally flown to Cyprus, to meet with Brito (FXWinning’s Chief Executive Officer), to examine FXWinning’s system, and review FXWinning’s liquidity, and that, on that trip, they had seen the liquidity bridge and how the deposits were made to FXWinning and then directly on to the liquidity provider (“Misrepresentation #3”). 43. In truth, Kuschner and Lopez had done no such thing because, at minimum, FXWinning did not actually have the liquidity providers it touted on its website. 44. In or around February 2022, in Miami-Dade County, Florida, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, represented to Kerns that if anything were to ever go wrong with his investment, Kuschner and Lopez would either 11 facilitate a process, or were aware of a surefire process, whereby Kerns could withdraw his funds from FXWinning (“Misrepresentation #4”). 45. Yet, FXWinning, Merino, Kuschner, and Lopez had no intention of facilitating a safe and easy process, nor were they aware of a surefire process, whereby Kerns could withdraw his funds from FXWinning, and, in the end, they did not actually facilitate any such exit process. 46. In reliance on the Website Misrepresentations, the Kuschner-Kerns Website Misrepresentations, and Misrepresentations #1 through #4, Kerns opened an account with FXWinning in his own name (the “Kerns Account”) in or about January 2022. 47. In reliance on the Website Misrepresentations, the Kuschner-Kerns Website Misrepresentations, and Misrepresentations #1 through #4, Kerns deposited more than $3 million into the Kerns Account between February 23, 2022, and January 2023. 48. FXWinning, Merino, Kuschner, and Lopez intended that (a) their representations to Kerns reach all of Kerns’s affiliates, including any corporate entity Kerns subsequently created or managed, and (b) all of Kerns’s affiliates, including any corporate entity Kerns subsequently created or managed, rely on FXWinning, Merino, Kuschner, and Lopez’s representations. 49. FXWinning, Kuschner, Lopez, and Merino were all aware that their representations to Kerns would be relied upon by all of Kerns’s affiliates, including any corporate entity Kerns subsequently created or managed. 50. FXWinning, Kuschner, Lopez, and Merino had reason to expect that Kerns would communicate their misrepresentations to his affiliates, including any corporate entity Kerns subsequently created or managed, and that their misrepresentations would influence those affiliates. 12 51. In or around June 2022, Kerns created Kerns Capital, a hedge fund that Kerns manages. Lopez, in his individual capacity and as agent for FXWinning and Merino, discussed the creation of Kerns Capital with Kerns prior to its creation and facilitated Kerns Capital’s use of FXWinning’s trading platform. 52. Kerns did communicate the above-alleged representations to Kerns Capital. 53. In reliance on the Website Misrepresentations, the Kuschner-Kerns Website Misrepresentations, and Misrepresentations #1 through #4, Kerns Capital deposited more than $6.2 million into an account on the FXWinning website (the “Kerns Capital Account”) between July 1, 2022, and January 31, 2023. 54. On June 30, 2022, at 9:43 p.m., Lopez, in his individual capacity and as agent of FXWinning and Merino, introduced Kerns and Kerns Capital to an FXWinning representative named Selena, by way of a WhatsApp group chat he titled “Fxwinning wires (ck).” Through a voice note sent via the WhatsApp group chat, Lopez stated the following to Kerns: Cody this is Selena, Selena works hands on with Rafa [Brito], the owner of the broker, David [Merino], and myself, um, on a back- end with everything that has to do with the system, brokering, and so on and so on. Anytime you send a wire just send it here, uh, if it’s a big wire just let her know at least one or two hours before, so we’re able to get it done. You’re capped at one hundred million dollars, but if you’re making one hundred-million-dollar wires, I’ll salute to you my brother. And yea, we’ll go from here. You have efficiency, anything you need on the back-end, she also helps me with everything, as well as David and Rafa. Misrepresentations to McGinnis 55. Meanwhile, in or about June 2022, McGinnis met Kuschner at a dinner with Kerns in Miami-Dade County, Florida. 13 56. After that dinner, Kuschner, in his individual capacity and as an agent of FXWinning and Merino, began soliciting McGinnis to begin trading in foreign currency through FXWinning. 57. On or about July 4, 2022, in a telephone conversation, Kuschner, in his individual capacity and as an agent of FXWinning and Merino, represented to McGinnis that: a. Kuschner and Lopez had fully vetted FXWinning (“Misrepresentation #5); b. Lopez and Kuschner personally flew out to meet and vet the broker and the liquidity provider (“Misrepresentation #6”); c. Lopez and Kuschner saw the actual funds held by FXWinning (“Misrepresentation #7”); and d. FXWinning was appropriately liquidated (“Misrepresentation #8”). 58. Misrepresentation #5 was false in that Kuschner and Lopez had not fully vetted FXWinning. 59. Misrepresentation #6 was false in that Kuschner and Lopez had not vetted the broker or any liquidity provider – especially because FXWinning did not have the liquidity providers touted on FXWinning’s website. 60. Misrepresentation #7 was false because neither Kuschner nor Lopez had seen the actual funds held by FXWinning. 61. Misrepresentation #8 was false because FXWinning was not appropriately liquidated, much less with the liquidity providers it touted on FXWinning’s website. 62. From July 7, 2022, during an in-person meeting in Miami-Dade County, Florida, until approximately April 2023 in both in-person and telephone calls, Lopez, in his individual 14 capacity and as agent of FXWinning and Merino, repeatedly represented to McGinnis that Lopez and Merino were partners and partners in FXWinning. 63. Alternatively, in the event that Lopez and Merino were not actually partners and/or partners in FXWinning, Lopez and Merino are liable for each other’s acts pursuant to partnership by estoppel. 64. Kuschner invited McGinnis over to his apartment in Miami to meet with Kuschner and Lopez on or around July 7, 2022. During that meeting, Lopez showed McGinnis what Lopez represented as Lopez’s FXWinning account, with $21 million in it. Kuschner showed McGinnis what Kuschner represented as Kuschner’s account, with between $5 million and $6 million in it. Lopez and Kuschner also showed McGinnis an account at FXWinning and stated that it belonged to someone in the royal family in Dubai with hundreds of millions of dollars in it. Lopez and Kuschner also discussed a Swiss hedge fund that Merino brought to FXWinning, which traded approximately $650 million. 65. During the July 7, 2022 meeting at Kuschner’s apartment, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, showed McGinnis the FXWinning websites and adopted the Website Misrepresentations as their own in, and as, representations to McGinnis (the “Kuschner/Lopez-McGinnis Website Misrepresentations”). 66. Lopez and Kuschner, in their individual capacities and as agents of FXWinning and Merino, touted the values of their accounts, as well as the gaudy amounts found in the accounts belonging to others, in order to induce McGinnis into investing in FXWinning through them. 67. On July 7, 2022, in reliance on the Website Misrepresentations, the Kuschner/Lopez-McGinnis Website Misrepresentations, and Misrepresentations #5 through #8, McGinnis opened an FXWinning account in his name (the “McGinnis Account”). 15 68. Between July 7, 2022, and July 12, 2022, in reliance on the Website Misrepresentations, the Kuschner/Lopez-McGinnis Website Misrepresentations, and Misrepresentations #5 through #8, McGinnis deposited $495,000 into the McGinnis Account. 69. In the midst of McGinnis’s first deposits, on or about July 11, 2022, Kuschner, in his individual capacity and as an agent of FXWinning and Merino, represented to McGinnis via a voice note, that if McGinnis wanted Merino to take him seriously in an upcoming phone call between them, McGinnis would need to deposit more funds and have his account at FXWinning reach over $1 million as soon as possible (“Misrepresentation #9”). 70. In fact, Merino was not taking such a position because FXWinning was all an unserious, fraudulent scheme. 71. In reliance on Misrepresentation #9 and the represented urgency for the increase, McGinnis deposited additional funds, bringing the McGinnis Account to over $1 million soon thereafter. FXWinning and its Agents Push for More Deposits from Plaintiffs 72. In or about April/May 2022, Lopez, in his individual capacity and as an agent of FXWinning and Merino, sent Kerns a message via Instagram teasing another, new opportunity on the horizon: 16 73. Plaintiffs later learned that this new opportunity was an FXWinning account for VIP clients that Bastos managed and controlled. 74. In or about September 2022, after Plaintiffs’ initial rounds of deposits, Kuschner and Lopez, in their individual capacities and as agents of FXWinning and Merino, gave Plaintiffs the details of that new opportunity that Lopez had teased a few months before. It was a VIP Multi- Account Manager (“VIP MAM”) account on FXWinning that would allegedly generate even higher returns for Plaintiffs. 75. On or about December 19, 2022, Kerns and Kerns Capital asked Kuschner what the required minimum deposit was for the Kerns Account and Kerns Capital Account to be VIP MAM accounts and earn higher returns from FXWinning. That same day, Kuschner, in his individual capacity and as agent of FXWinning and Merino, told Kerns and Kerns Capital via text message that he believed it was $3.5 million, but that Kerns/Kerns Capital should ask Lopez. Kuschner, in his individual capacity and as agent of FXWinning and Merino, also told Kerns and 17 Kerns Capital that Merino was increasing the minimum limit for 2023, the new year. That same day, Kuschner, in his individual capacity and as agent of FXWinning and Merino, also said via text message that “Morton was asking if [Merino] could get him in [to the VIP MAM] with 2.3 [million dollars]” but Merino “[s]aid ‘no get more $’”: 76. Following Kuschner’s suggestion, Kerns and Kerns Capital reached out to Lopez via text message and asked him what the minimum deposit for a VIP MAM was. Lopez, in his individual capacity and as agent of FXWinning and Merino, responded via text message by saying Kerns and Kerns Capital needed to deposit a minimum of $3.5 million by the end of 2022 and, after that, the minimum would be increasing, again, to $4.5 million or $5 million by around January 10, 2023 (which he later in the text conversation corrected to $5 million by January 1, 2023). Thus, on or about December 19, 2022, via text message, both Kuschner and Lopez, in their individual capacities and as agents of FXWinning and Merino, told Kerns and Kerns Capital that they needed 18 to deposit a minimum of $3.5 million by the end of 2022 to be eligible for the VIP MAM (“Misrepresentation #10”). Lopez, in his individual capacity and as agent of FXWinning and Merino, also told Kerns and Kerns Capital on December 19, 2022, via text message, that there was a “huge line” of investors waiting to join the VIP group (“Misrepresentation #11”): 77. Misrepresentation #10 was false because there was no actual required minimum deposit in light of FXWinning’s being a fraudulent scheme. 78. Misrepresentation #11 was false because there was not a “huge line” of investors waiting and the VIP MAM was simply another maneuver by which FXWinning perpetrated its fraudulent scheme to convince investors to transfer money to FXWinning. 79. In reliance on Misrepresentations #10 and #11, and believing time was of the essence, Kerns avoided making withdrawals from the Kerns Account at a time that withdrawals 19 were still possible, which withdrawals he would have otherwise made, so that the Kerns Account had the minimum amount for the VIP MAM. 80. For his part, FXWinning moved McGinnis to the VIP MAM without his knowledge or consent. 81. In or around December 2022, Kuschner and Lopez, acting in their individual capacities and as agents of FXWinning and Merino, represented to McGinnis in person and/or via telephone calls that he had to maintain a balance of approximately $4 million to stay in the VIP MAM, with the minimum balance probably going up to $5 million soon (“Misrepresentation #12”). 82. Misrepresentation #12 was false in that there was no actual minimum balance to stay in the VIP MAM. 83. In reliance on Misrepresentation #12, McGinnis avoided making withdrawals that he would have otherwise made in order to maintain an account balance of at least $4 million. Given what was to happen soon, McGinnis never got the chance to make those withdrawals. 84. Incredibly, upon information and belief, at or around the time Kuschner and Lopez (acting in their individual capacities and as agents of FXWinning and Merino) were convincing Kerns and McGinnis to quickly deposit more money into the VIP MAMs and/or to maintain their balances at the status quo, Kuschner and Lopez were making large withdrawals – totaling millions of dollars – from their own FXWinning accounts, including but not limited to, a multi-million dollar withdrawal Lopez made shortly before December 9, 2022. 20 Kuschner, Lopez, Merino, and Bastos Earned Huge Commissions Directly From Plaintiffs’ Accounts 85. Once per month, Kushner, Lopez, Bastos, and Merino pulled out 35-50% commissions directly from the Kerns Account, the Kerns Capital Account, and the McGinnis Account, and thereafter divided those commissions amongst themselves. 86. Upon information and belief, Bastos had instructed Kuschner and Lopez to not advise Plaintiffs that Bastos was involved in the operation of the VIP MAM, or that he was receiving commissions directly from Plaintiffs’ accounts, so that he could stay hidden from Plaintiffs’ view. 87. Upon information and belief, Bastos received approximately $80 million to $90 million in commissions through the scheme Defendants perpetrated against FXWinning clients, including, as mentioned, from commissions Bastos received directly from Plaintiffs’ accounts. 88. Upon information and belief, Brito – as CEO and/or co-owner of FXWinning – received a portion of the profits from the scheme perpetrated against Plaintiffs. In other words, he obtained a portion of the principal that Plaintiffs deposited into their FXWinning accounts, which Brito obtained directly from Plaintiffs’ accounts. 89. Upon information and belief, Lopez earned more than $1.1 million per month in commissions from people he solicited to trade through FXWinning, including the commissions Lopez received directly from Plaintiffs’ accounts. FXWinning Claims to be Under a Know Your Customer/Anti-Money Laundering Audit 90. In early 2023, FXWinning told Plaintiffs through FXWinning’s public newsletter that FXWinning was undergoing a Know Your Customer/Anti-Money Laundering (“KYC/AML”) audit. 21 91. In early 2023, Lopez also advised Kerns via text message that the liquidity providers were conducting the audit, and that Brito submitted to the liquidity providers all of the documents that the liquidity providers’ compliance teams had requested. 92. Upon information and belief, at that time, FXWinning was managing roughly $5 billion in investments. 93. In or around March 2023, Kuschner and Lopez, in their individual capacities and as agents of FXWinning and Merino, represented to Kerns and Kerns Capital that Kuschner and Lopez were flying to Dubai to meet with Merino and Brito in person to review the company’s situation in light of the KYC/AML audit. 94. In or around March 2023, Kuschner and Lopez, in their individual capacities and as agents of FXWinning and Merino, represented to Kerns and Kerns Capital that they met with Merino and Brito and saw $3 billion in FXWinning liquidity with their own eyes. Kuschner and Lopez also represented that Kerns and Kerns Capital’s money was safe. 95. Kerns and Kerns Capital also met in person with Kuschner, Lopez, and Merino at Lopez’s home in Miami, Florida, in or around March 2023. During that meeting, Merino told Kerns and Kerns Capital that the Kerns Account and the Kerns Capital Account were safe, and that all money would be released and paid. 96. On or about April 25, 2023, Merino told Kerns and Kerns Capital that Merino would personally pay out both of their accounts if the KYC/AML audit was not resolved by June 2023. 97. As part of the KYC/AML audit, FXWinning asked Plaintiffs for large amounts of personal information, as well as information related to the hedge fund and Kerns Capital, in order to complete the KYC/AML audit. 22 98. FXWinning and Merino also informed Plaintiffs that they were prohibited from withdrawing from their accounts during the audit. 99. On or about June 6, 2023, FXWinning advised Kerns Capital that Kerns Capital had completed and passed the KYC/AML process. 100. On June 11, 2023, FXWinning advised Kerns that Kerns had completed and passed the KYC/AML process. 101. On or about June 13, 2023, FXWinning informed Kerns Capital via email that a previously requested withdrawal would be processed from the Kerns Capital Account. 102. On June 21, 2023, FXWinning posted to its website, in relevant part, the following notice: Therefore, FXWinning caused Kerns and Kerns Capital to believe that there were minor delays due to a high demand of requests and that Kerns and Kerns Capital would receive their funds on or about July 7, 2023. 103. On June 6, 2023, FXWinning advised McGinnis that he had completed and passed the KYC/AML process. 104. Shortly thereafter, FXWinning advised McGinnis that his withdrawal of the entire balance in the McGinnis Account would be processed within 15 business days. FXWinning Shuts Down and Prevents Plaintiffs From Obtaining Their Funds 105. On June 20, 2023, FXWinning posted the following message on its website: Important Notice: FxWinning Limited regrets to inform you that due to unforeseen circumstances, our services will cease on Thursday, 22.06.2023. Please close all 23 open trades before Wednesday 21.06.2023 13:00 GMT+3 to avoid possible problems. Kindly withdraw your remaining funds promptly, and our team will assist you in the process. Withdrawals will be available until Friday 30.06.2023. We apologize for any inconvenience caused and appreciate your understanding during this challenging time. 106. Contrary to FXWinning’s representation, FXWinning never processed Plaintiffs’ withdrawal attempts. 107. Moreover, Plaintiffs have repeatedly demanded that their funds be returned. To date, Defendants have failed to return any of Plaintiffs’ money. 108. On or about June 28, 2023, Brito represented to Kerns and Kerns Capital, via text message, that Kerns and Kerns Capital would receive their money. Brito then blocked them so that Kerns and Kerns Capital could not text him anymore. 109. Despite the campaign of promises, reassurances, and commitments to release funds promulgated by FXWinning, Kuschner, Lopez, Merino, and Brito, with the assistance of Bastos behind the scenes, none of the Plaintiffs ever received any of their withdrawals. Indeed, none of them ever saw their money again. 110. At the time of filing this lawsuit, Defendants have taken approximately $6 million from the Kerns Account. 111. At the time of filing this lawsuit, Defendants have taken approximately $12.7 million from the Kerns Capital Account. 112. At the time of the filing of this lawsuit, Defendants have taken approximately $9.7 million from the McGinnis Account. 113. Since the inception of FXWinning and Defendants’ relationship with Plaintiffs, Defendants all knew or should have known that (1) FXWinning did not have the liquidity providers FXWinning touted on its website, (2) FXWinning was nothing more than a fraudulent scheme to 24 induce potential traders to transfer money to FXWinning; (3) no high rate of return would be possible; and (4) Plaintiffs would never receive a full withdrawal of their deposited money as they were promised. Kuschner, Lopez, and Merino were FXWinning’s Agents; Lopez and Kuschner were Merino’s Agents 114. At all material times, as shown above, Kuschner, Lopez, and Merino were agents of FXWinning. 115. In particular, as alleged above, prior to February 2022, FXWinning authorized Kuschner, Lopez, Merino, and others to solicit clients that would engage in foreign exchange trading, as well as open accounts, with FXWinning. 116. Through that express authorization, FXWinning acknowledged that Kuschner, Lopez, Merino, and others would act for it. 117. Kuschner, Lopez, Merino, and others accepted that undertaking when they proceeded to solicit clients such as Plaintiffs in the manner aforesaid. 118. FXWinning had control over the actions of Kuschner, Lopez, Merino, and others in that, at minimum, it created and oversaw the marketing and advertising pitch for the agents to use to solicit clients such as Plaintiffs. 119. Prior to February 2022, as alleged above, Merino also authorized Kuschner, Lopez and others to speak on his individual behalf when soliciting potential FXWinning clients such as Plaintiffs. 120. Through that express authorization, Merino acknowledged that Kuschner and Lopez would act for him. 121. Kuschner and Lopez accepted that undertaking when they proceeded to solicit clients such as Plaintiffs in the manner aforesaid. 25 122. Merino had control over the actions of Kuschner and Lopez in that Kuschner and Lopez reported to Merino and would need his approval to engage in the various solicitation activities. 123. To this end, in a text message on April 25, 2023, Merino, both individually and as an FXWinning owner, confirmed to Kerns and Kerns Capital that he and Lopez were working together on FXWinning. 124. In or around August 2022, McGinnis participated in a Zoom call with Lopez and Merino, both individually and as an FXWinning owner, in which McGinnis discussed FXWinning with Lopez and Merino. 125. Furthermore, on at least one occasion, Merino, individually and on behalf of FXWinning, joined Kuschner and Lopez at an in-person meeting with Plaintiffs Kerns and Kerns Capital. That meeting, which occurred at Lopez’s home, involved a discussion about Kerns and Kerns Capital’s accounts with FXWinning. 126. Merino, both individually and as an FXWinning owner, never disavowed Kuschner and Lopez’s speaking on his or FXWinning’s behalf. 127. As outlined above, FXWinning and Merino represented to Plaintiffs that Kuschner and Lopez were speaking on FXWinning and Merino’s behalf. 128. Plaintiffs relied on FXWinning and Merino’s representation to Plaintiffs that Kuschner and Lopez were working on their behalf, and Plaintiffs changed their position in reliance on that representation, when Plaintiffs deposited money into their FXWinning accounts, added money to their FXWinning accounts, and/or avoiding making withdrawals from their FXWinning accounts at a time when making withdrawals was still possible. 26 129. All conditions precedent to the filing of this action have been met, satisfied, or otherwise waived. 130. Plaintiffs have retained the undersigned law firm and are obligated to pay reasonable attorney’s fees and costs. COUNT 1 – COMMON LAW FRAUD (Kerns against FXWinning) 131. Kerns re-alleges and incorporates through reference paragraphs 1 through 130 as if set forth fully herein. 132. FXWinning made false statements of fact to Kerns, including FXWinning’s Website Misrepresentations, FXWinning’s Kuschner-Kerns Website Misrepresentations, and FXWinning’s Misrepresentations #1 through #4, #10, and #11, as alleged above. Those statements were false for the reasons alleged in paragraphs 29, 34, 41, 43, 45, 77, and 78 above. 133. In reliance on FXWinning’s Website Misrepresentations, FXWinning’s Kuschner- Kerns Website Misrepresentations, and FXWinning’s Misrepresentations #1 through #4, Kerns opened the Kerns Account in or about January 2022 and deposited more than $3 million into the Kerns Account between February 23, 2022 and January 2023. 134. In reliance on FXWinning’s Misrepresentations #10 and #11, and believing time was of the essence, Kerns avoided withdrawing funds from the Kerns Account at a time that withdrawals were still possible, which withdrawals he would have otherwise made, so that the Kerns Account had the minimum amount for the VIP MAM. 135. FXWinning knew that the aforementioned representations were false when it made them to Kerns. Since the inception of FXWinning’s relationship with Kerns, FXWinning knew that (1) FXWinning did not have the liquidity providers it touted on FXWinning’s website; (2) it was nothing more than a fraudulent scheme to induce potential traders to transfer money to 27 FXWinning; (3) no high rate of return would be possible or occur; (4) Kerns would never receive a full withdrawal of his deposited money as he was promised; and (5) the VIP MAM was just another ruse to convince traders to transfer more money to FXWinning. 136. FXWinning never intended to comply with, or fulfill, its representations when it made them to Kerns. 137. FXWinning made the representations to Kerns for the purpose of inducing Kerns to act in reliance thereon. 138. Kerns did, in fact, rely on the truthfulness of FXWinning’s representations when he deposited money with FXWinning, and/or increased the value of his account with FXWinning in the manner outlined above, and/or did not withdraw the value of his account at a time when FXWinning was allowing withdraws to be processed (that is, on or before January 2023). 139. As a result of FXWinning’s conduct, Kerns has been damaged. That damage includes, but is not limited to, the loss of his funds deposited in FXWinning. WHEREFORE, Plaintiff Kerns demands judgment against Defendant FXWinning for damages, costs, interest as allowed by law, and such further relief this Court deems just and proper. COUNT 2– COMMON LAW FRAUD (Kerns Capital against FXWinning) 140. Kerns Capital re-alleges and incorporates through reference paragraphs 1 through 130 as if set forth fully herein. 141. FXWinning made false statements of fact to Kerns Capital, including FXWinning’s Website Misrepresentations, FXWinning’s Kuschner-Kerns Website Misrepresentations, and FXWinning’s Misrepresentations #1 through #4, as alleged above. Those statements were false for the reasons alleged in paragraphs 29, 34, 41, 43, and 45 above. 28 142. In reliance on FXWinning’s Website Misrepresentations, FXWinning’s Kuschner- Kerns Website Misrepresentations, and FXWinning’s Misrepresentations #1 through #4, Kerns Capital opened the Kerns Capital Account and deposited more than $6.2 million into the Kerns Capital Account between July 1, 2022 and January 31, 2023. 143. FXWinning knew that the aforementioned representations were false when it made them to Kerns Capital. Since the inception of FXWinning’s relationship with Kerns Capital, FXWinning knew that (1) FXWinning did not have the liquidity providers it touted on FXWinning’s website; (2) it was nothing more than a fraudulent scheme to induce potential traders to transfer money to FXWinning; (3) no high rate of return would be possible or occur; and (4) Kerns Capital would never receive a full withdrawal of its deposited money as it was promised. 144. FXWinning never intended to comply with, or fulfill, its representations when it made them to Kerns Capital. 145. FXWinning made the representations to Kerns Capital for the purpose of inducing Kerns Capital to act in reliance thereon. 146. Kerns Capital did, in fact, rely on the truthfulness of FXWinning’s representations when it deposited money with FXWinning, and/or increased the value of its account with FXWinning in the manner outlined above, and/or did not withdraw the value of its account at a time when FXWinning was allowing withdraws to be proce