The Commodity Futures Trading Commission (CFTC) filed a civil complaint in the U.S. District Court for the Eastern District of New York against Technical Trading Team (TTT) and a few of its executives.
The complaint charges the company, along with CEO Edwin Carrion and COO and head trader Jason Rodriguez, for fraudulently soliciting over $5 million for participation in a foreign currency (forex) commodity pool scheme. Specifically, the charges are for fraud in connection with retail forex transactions, fraud in connection with being a commodity pool operator (CPO) and associated persons (AP) of a CPO, and failure to register as a CPO and as APs of a CPO.
The complaint alleges the defendants made false and misleading statements regarding their investment track record and the safety of investing in the TTT pool to participants and potential participants. Further, after losing over $3 million by trading retail forex on a leveraged basis, the defendants falsely assured pool participants they could recoup the losses using artificial intelligence-based (AI) trading algorithms. This occurred from approximately January 2020 to the present.
“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,” CFTC Director of Enforcement Ian McGinley said. “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 artificial intelligence or machine learning.”
The CFTC is seeking 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 CFTC regulations as charged.
According to the complaint, the defendants solicited approximately $5 million from 27 pool participants. The defendants lost over $3.13 million trading forex on a leveraged basis, misappropriated funds for personal use, and used new participants’ funds to pay interest to existing participants.
The Division of Enforcement staff responsible for this matter are Peter Janowski, Diana Wang, Trevor Kokal, Patryk Chudy, Lenel Hickson, Jr., and Manal Sultan. The Division of Enforcement’s Cybersecurity and Emerging Technologies Task Force also assisted in this matter.