The Commodity Futures Buying and selling Fee (CFTC) has introduced fees towards Edwin M. Carrion, Jason F. Rodriguez, and Technical Buying and selling Group LLC (TTT).
Based on the CFTC grievance, filed with the New York Jap District Court docket, from a minimum of January 2020 by the current (the “Related Interval”), Edwin M. Carrion, individually and as agent of TTT, and Jason F. Rodriguez, individually and as agent of TTT, and TTT, operated a fraudulent scheme wherein Defendants solicited, accepted, and misappropriated funds for a pooled funding in, amongst different issues, leveraged or margined Foreign exchange contracts.
Carrion, as Chief Government Officer and agent of TTT, and Rodriguez as Chief Working Officer and agent of TTT, knowingly or recklessly made fraudulent and materials misrepresentations and omissions, in each conversations and written communications, about TTT’s retail foreign currency trading technique, their expertise and monitor file as funding managers, and the safety and danger administration of investing within the TTT Pool.
Defendants collectively persuaded roughly twenty-seven people to speculate a minimum of $5 million within the TTT Pool. Investments have been made within the type of loans by members within the TTT Pool to TTT, memorialized in promissory notes, for which TTT promised to make month-to-month curiosity funds starting from 1.5 to 2%, or 18 to 24% annual curiosity.
To entice potential pool members, Defendants Carrion and Rodriguez—and TTT by Carrion and Rodriguez—knowingly or recklessly made materially false or deceptive statements and omissions, that, amongst different issues:
- Defendants provided the power to take part in a high-yield mortgage program backed by a retail foreign currency trading fund that would help curiosity funds of 18 to 24% annualized curiosity;
- Defendants would keep a reserve fund to maintain the principal of the pool members’ loans to the TTT Pool from being put at extreme danger;
- Defendants’ funding technique was to danger 1% of the TTT Pool with the objective of returning 3% revenue;
- Defendants wouldn’t maintain positions in a single day, thus protecting the TTT Pool liquid; members’ loans have been secured by TTT’s property, together with actual property, that will not be invested and thus might function collateral; and
- Defendants had an intensive and profitable monitor file investing in retail foreign exchange and digital property.
- The statements and omissions have been materially false or deceptive, and induced pool members and potential members to speculate their cash with TTT.
Defendants knew or have been reckless in not figuring out that their retail foreign currency trading couldn’t maintain their guarantees to pool members to pay fastened charges of return of 18 to 24%. Certainly, Defendants have been unsuccessful of their efforts to commerce retail foreign exchange.
From April 2020 by October 2022, Defendants misplaced over $3.13 million of pool members’ cash buying and selling retail foreign exchange on a leveraged foundation. Furthermore, Defendants misappropriated participant funds for private use and, because of their unprofitable buying and selling, used new members’ funds to make curiosity funds to current members.
On or about October 11, 2022, Defendants notified sure pool members that TTT had defaulted on members’ loans and that TTT would now not be making curiosity or principal funds due below the members’ promissory notes.
The CFTC accuses the defendants of violation of Sections 6(c)(1), 4b(a)(2)(A)–(C), and 4o(1)(A)–(B) of the Commodity Change Act (“Act”), 7 U.S.C. §§ 9(1), 6b(a)(2)(A)–(C), 6o(1)(A)–(B), and Fee Rules (“Regulation”) 180.1(a)(1)–(3) and 5.2(b)(1)–(3), 17 C.F.R. § 180.1(a)(1)–(3) 17 C.F.R. § 5.2(b)(1)–(3) (2022), which prohibit fraud, and fraud in reference to retail foreign exchange transactions and by a commodity pool operator (“CPO”).
Along with the above-described fraudulent conduct, Defendant Technical Buying and selling Group acted always throughout the Related Interval as a CPO by working or soliciting funds for a retail foreign exchange pool that didn’t qualify as an eligible contract participant (ECP) and was marketed to pool members who have been additionally not ECPs, and engaged in retail foreign exchange transactions, with out being registered with the Fee as a CPO, in violation of Sections 2(c)(2)(C)(iii)(I)(cc) and 4m(1) of the Act, 7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc), 6m(1), and Regulation 5.3(a)(2)(i), 17 C.F.R. § 5.3(a)(2)(i) (2022).
Additional, Defendants Carrion and Rodriguez solicited funds from pool members for the aim of buying and selling in leveraged or margined retail foreign exchange contracts in accounts pooled with different members, whereas related to Defendant Technical Buying and selling Group as an officer, worker, or agent, with out being registered with the Fee as an related particular person (“AP”) of Technical Buying and selling Group, in violation of Sections 2(c)(2)(C)(iii)(I)(cc) and 4k(2) of the Act, 7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc), 6k(2), and Rules 3.12(a) and 5.3(a)(2)(ii), 17 C.F.R. §§ 3.12(a), 5.3(a)(2)(ii) (2022).
The Fee seeks civil financial penalties and remedial ancillary aid, together with, however not restricted to, buying and selling and registration bans, restitution, disgorgement, rescission, pre- and post- judgment curiosity.