The Commodity Futures Buying and selling Fee’s (CFTC) has filed Movement for Abstract Judgment towards Daniel W. LaMarco, the person behind fraudulent Foreign exchange scheme GDLogix.
In keeping with the CFTC’s proposal, LaMarco shall pay a civil financial penalty of $2,587,800, which is the same as thrice LaMarco’s financial acquire of $862,600 from the fraudulent scheme, plus post-judgment curiosity thereon.
LaMarco will even should pay restitution within the quantity of $862,600.
The CFTC movement proposes that LaMarco is completely enjoined and prohibited from knowingly, willfully, or recklessly: (1) dishonest or defrauding or trying to cheat or defraud different individuals; (2) making or inflicting to be made false stories or statements to such different individuals; and/or (3) deceiving or trying to deceive such different individuals, in or in reference to orders to make, or the making of, any commodity for future supply.
As alleged within the CFTC Grievance, from January 2011 via March 2016 (the “Related Interval”), LaMarco, individually and as agent and officer of GDLogix, fraudulently solicited and accepted $1,492,650 from 13 people to commerce off-exchange leveraged or margined retail Foreign exchange contracts in a commodity pool operated by the defendants.
LaMarco, by phrase of mouth, e mail, the Web, the usage of mails and different means, solicited and accepted $1,492,650 from the pool members on behalf of GDLogix. LaMarco solicited members by falsely representing to them that he was a worthwhile dealer and touting the purported security of his foreign exchange funding technique and the success of his private investments in foreign exchange. LaMarco offered members with a GDLogix “Memorandum of Providing,” which indicated that members’ funds could be positioned in a commodity pool run by GDLogix and offered fraudulent pool internet asset values.
All of those representations had been materials and false. LaMarco additionally omitted materials details in his solicitations to pool members, together with however not restricted to failing to reveal that: neither he nor GDLogix had ever been registered with the CFTC in any capability; he was misappropriating members’ funds; and, he was shedding members’ funds buying and selling foreign exchange in his private accounts.
LaMarco used his software program consultancy enterprise, GDLogix, to facilitate his foreign exchange solicitation and buying and selling actions. He deposited members’ funds right into a GDLogix checking account at J.P. Morgan Chase, in addition to two private financial institution accounts at J.P. Morgan Chase. All of those financial institution accounts had been opened by LaMarco and underneath his management.
Of the over $1.4 million solicited and accepted from pool members, LaMarco transferred roughly $1.3 million to 2 private buying and selling accounts opened in his title at registered futures fee service provider (FCM) Achieve Capital. These buying and selling accounts had been private accounts held within the title of, and for the advantage of, LaMarco, and never opened or held for the advantage of pool members.
LaMarco suffered important buying and selling losses in his private buying and selling accounts and misplaced the vast majority of members’ funds via his unprofitable buying and selling. Achieve Capital closed each of LaMarco’s private buying and selling accounts in April 2016.
LaMarco additionally misappropriated members’ funds by returning $630,050 to sure pool members as purported buying and selling “income” within the nature of a “Ponzi” scheme. He misplaced the remaining funds buying and selling or utilizing them to pay his private bills.
To hide and perpetrate his fraud, LaMarco offered pool members with false month-to-month account statements exhibiting the pool’s account exercise, together with purported buying and selling income and account balances.
In February 2016, LaMarco represented to pool members in these statements that the entire worth of the Pool had elevated to over $1.79 million. In actuality, nevertheless, LaMarco had misplaced practically all of members’ funds via unsuccessful buying and selling and by diverting $630,050 of the entire principal invested as Ponzi funds to sure members.