— The  Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the District of New Jersey against defendants Tradewale LLC, of Illinois, and Tradewale Managed Fund, of the United Kingdom, (collectively, Tradewale), and Valdas Dapkus, also of Illinois, charging the defendants with misappropriation fraud and Tradewale with solicitation fraud for trading off-exchange retail foreign currency (forex) and acting as a Commodity Trading Advisor (CTA) without CFTC registration.

In its continuing litigation, the CFTC is seeking civil monetary penalties, trading and registration bans, restitution, disgorgement, and a permanent injunction prohibiting the defendants from committing further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

Case Background

According to the complaint, through its website, tradewale.com, as well as various social media platforms, Tradewale fraudulently solicited members of the public to deposit funds into accounts managed by Tradewale for the purported purpose of buying and selling investment products, including forex. Through such solicitations, Tradewale persuaded at least 15 individuals to transfer at least $ 700,000 to Tradewale.

In soliciting members of the public to trade, Tradewale made various material misrepresentations and omissions, including that it had a “unique trading system” using “artificial intelligence” to trade forex, and that it generated average monthly returns of 4% – 11% and average yearly returns of over 55% with “minimal risk.”  Although Tradewale’s solicitation materials claimed that accounts could be “easily accessed,” most, if not all, U.S. customers of Tradewale were never able to withdraw funds from their accounts. Instead, the defendants misappropriated customer funds for unauthorized purposes, including misappropriation of funds in bank accounts Dapkus established and for which he was the sole signatory.

The complaint further alleges that Tradewale is liable for Dapkus’ misappropriation fraud because he committed his violations within the scope of his employment, agency or office with Tradewale LLC.

CFTC Division of Enforcement staff members responsible for this matter are Katie Rasor, Christopher Giglio, David MacGregor, Lenel Hickson, and Manal Sultan.

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CFTC’s Commodity Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify this sort of scam.

The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online or contact the CFTC Whistleblower Office.  Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions and paid to the CFTC by violators of the CEA. 

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Author: Editor
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