CFTC Takes Action against Alleged $5 Million Forex Scheme

<p>The
Commodity Futures Trading Commission (CFTC) has taken legal action against
Technical Trading Team, LLC (TTT), along with its Chief Executive Officer,
Edwin Carrion, and Chief Operating Officer, Jason Rodriguez. </p><p>Multiple
Charges Leveled against Defendants in CFTC Complaint</p><p>The
CFTC has filed a civil complaint in the US District Court for the Eastern
District of New York. The complaint accuses them of orchestrating a fraudulent
foreign currency (forex) commodity pool scheme that allegedly defrauded
investors of over $5 million.</p><p>The
complaint levels multiple charges against TTT, Carrion, and Rodriguez,
including fraud in connection with retail forex transactions and fraud in
connection with being a commodity pool operator (CPO) and associated persons
(AP) of a CPO. The defendants are accused of failing to register as a CPO and
as APs of a CPO.</p><p>According
to the CFTC, the defendants are alleged to have made false and misleading
statements regarding their investment track record and the safety of investing
in the TTT pool. They assured participants that they could recoup losses using
artificial intelligence-based (AI) trading algorithms, after suffering losses
exceeding $3 million through leveraged retail forex trading.</p><p>The
CFTC's complaint seeks a range of remedies. These include a civil monetary
penalty, full restitution to defrauded pool participants, disgorgement of
ill-gotten gains, permanent registration and trading bans, and a permanent
injunction against future violations of the Commodity Exchange Act (CEA) and the CFTC regulations as charged.</p><p>“As
alleged, the defendants made false and misleading statements and promises about
the safety and profitability of becoming a pool participant in the TTT
commodity pool,” said the Director of Enforcement, Ian McGinley. </p><p>“As
a result of entrusting their money to TTT in light of these false promises,
pool participants lost millions of dollars. Today’s filing once again
demonstrates how the CFTC will hold fraudsters in our markets accountable for
their wrongdoing, whether utilizing traditional technical trading techniques or
emerging technologies, such as <a href="https://www.financemagnates.com/tag/artificial-intelligence/">artificial
intelligence</a> or machine learning."</p><blockquote><p lang="en" dir="ltr"><a href="https://twitter.com/CFTC?ref_src=twsrc%5Etfw">@CFTC</a> charged a trading firm, CEO, and COO with a $5M forex commodity pool scheme. Learn more: <a href="https://t.co/nJG8TKejCr">https://t.co/nJG8TKejCr</a></p>— CFTC (@CFTC) <a href="https://twitter.com/CFTC/status/1710375058307260599?ref_src=twsrc%5Etfw">October 6, 2023</a></blockquote><p>Promises of Lucrative Returns
and Investment Safety</p><p>The
alleged scheme is said to have operated from approximately January 2020 to the
present. During that period, Carrion and Rodriguez solicited individuals who
were not eligible contract participants to invest in the TTT commodity pool,
which traded <a href="https://www.financemagnates.com/tag/retail-forex/">retail
forex</a> on margin.</p><p>Investors
were promised annual interest rates ranging from 18% to 24% paid monthly for
a one-year period, along with the return of their principal investments at
maturity.</p><p>To
attract investors, Carrion and Rodriguez purportedly exaggerated their forex
trading track record. They falsely promised to maintain a reserve fund equal to
participants' contributions, guaranteed limited risk exposure, and
misrepresented the collateral assets available to secure participants'
contributions. The CFTC contends that all these representations were false or
misleading.</p><p>The
complaint alleges that the defendants solicited approximately $5 million from
27 pool participants. Subsequently, they lost over $3.13 million in leveraged
forex trading, misappropriated funds for personal use, and utilized new
participants' investments to pay interest to existing participants. </p><p>In
an attempt to conceal their fraudulent activities, the defendants claimed they
would recover losses and repay loans by implementing an AI-powered trading bot.</p><p>The
complaint asserts that TTT operated as a CPO without the required registration,
and Carrion and Rodriguez acted as associated persons of a CPO without proper
registration. The defendants are also accused of making false statements to a
registered <a href="https://www.financemagnates.com/tag/foreign-exchange/">foreign
exchange</a> dealer concerning the source of TTT's funds and the nature of its
business activities.</p><p>The
<a href="https://www.financemagnates.com/tag/cftc/">CFTC</a> has cautioned
victims that restitution orders may not guarantee the recovery of lost funds
due to the wrongdoers' potential lack of sufficient funds or assets. The agency
reaffirmed its commitment to protecting customers and holding those responsible
accountable.</p><p>Investigations
and legal proceedings in this case are ongoing as the CFTC continues its
efforts to uncover the full extent of the alleged misconduct and protect the
interests of affected investors.</p>

This article was written by Tareq Sikder at www.financemagnates.com.