Showing posts with label ALLEGED COMMODITY TRADING FRAUD. Show all posts
Showing posts with label ALLEGED COMMODITY TRADING FRAUD. Show all posts

Sunday, June 10, 2012

NEVADA RESIDENT AND COMPANY TO PAY $2.6 MILLION TO SETTLE ALLEGED FOREIGN CURRENCY TRADING FRAUD WITH CFTC


FROM:  COMMODITY FUTURES TRADING COMMISSION
CFTC Orders Nevada Resident Luis Salazar-Correa and His Company, Prosperity Team, LLC, to Pay More than $2.6 Million to Settle CFTC Anti-fraud Forex Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed and simultaneously settled charges against Luis Salazar-Correa of Las Vegas, Nev., and his Nevada-based company, Prosperity Team, LLC, for fraudulently soliciting individuals to participate in a pooled investment vehicle, misappropriating customer funds, and issuing false statements to conceal trading losses and the fraud.

The CFTC order requires Salazar-Correa and Prosperity Team jointly and severally to pay a $1 million civil monetary penalty and restitution of $1,641,000. The order permanently prohibits Salazar-Correa and Prosperity Team from engaging in certain commodity-related activities, including trading, and from registering or seeking exemption from registration with the CFTC. The order also permanently prohibits the respondents from further violations of the Commodity Exchange Act, as charged.

The order finds that from about February 2009 through at least June 2010, Salazar-Correa and Prosperity Team fraudulently solicited and accepted at least $2,482,000 from at least 183 customers primarily for the purpose of trading leveraged or margined off-exchange foreign currency (forex) contracts through a pool investment vehicle, also known as Prosperity Team. In soliciting potential customers, Salazar-Correa falsely guaranteed monthly returns varying from 10 percent to 25 percent, depending on the amount invested, and misrepresented the risks of trading forex, the order finds.

Rather than achieving the claimed returns, the respondents consistently sustained trading losses, which cumulated in overall losses of approximately $1,566,000, and operated a Ponzi scheme by misappropriating customers’ funds to make payments to other customers, the order finds.

Salazar-Correa and Prosperity Team concealed the massive trading losses and their misappropriation of customer funds by issuing false statements, which were accessible to customers online through Prosperity Team’s website, the order finds.
The CFTC appreciates the assistance of the U.S. Attorney’s Office and Federal Bureau of Investigation in Las Vegas, Nev., the U.S. Securities and Exchange Commission, the Cyprus Securities and Exchange Commission, the International Financial Services Commission of Belize, the Swiss Financial Market Supervisory Authority, and the U.K. Financial Services Authority.

CFTC Division of Enforcement staff members responsible for this case are Alison Wilson, Jonathan Huth, Heather Johnson, Brandon Tasco, Gretchen L. Lowe, and Vincent A. McGonag

Friday, May 25, 2012

CFTC CHARGES CHICAGO-BASED TRADER WITH FRAUD


Photo:  Chicago Board Of Trade Granite Lady.  Credit:  Wikimedia.
FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION
CFTC Charges Chicago-based Trader Bradley Schiller with $7.8 Million Commodity Fraud
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today filed a complaint in the U.S. District Court for the Northern District of Illinois, chargingBradley Scott Schiller of Chicago, Ill., with solicitation fraud, misappropriating investors’ funds, and issuing false statements in connection with soliciting at least $7.8 million from at least six investors to trade commodity futures contracts in managed accounts.

Specifically, the CFTC complaint alleges that since at least January 2008 to at least February 2012, in soliciting investors and throughout the course of the investment scheme, Schiller lied about his success as a trader and used altered account statements to bolster his claims. His actual trading in the accounts, however, resulted in net trading losses, and, when his investors demanded the return of their funds, Schiller put them off until he could solicit funds from new investors. Schiller then used much of the funds he obtained from the new investors to pay back his old investors.

However, according to the complaint, of the at least $7.8 million Schiller received since January 2008, he deposited only approximately $3.7 million of those funds into trading accounts, lost approximately $1.6 million in trading, and withdrew over $2.1 million from the trading accounts, leaving near zero balances in the accounts. Schiller misappropriated investor funds to support “a lavish lifestyle,” purchasing expensive automobiles, a pricy, high-rise condominium, and paying personal expenses, according to the complaint. He also allegedly used at least $3.5 million of investor funds to repay two of his early investors and still owes four of his investors at least $4.35 million.

In its continuing litigation against the defendant, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, a civil monetary penalty, trading and registration bans, and permanent injunctions against further violations of federal commodities laws.

CFTC Division of Enforcement staff members responsible for this case are Jennifer Diamond, Judith McCorkle, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.

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