The U.S. District Court for the District of New Jersey issued a default order of final judgment against Illinois-based Valdas Dapkus on Nov. 28, according to the Commodity Futures Trading Commission (CFTC).
On May 4, the court issued a default order of final judgement against two entities Dapkus controlled—Tradewale LLC and Tradewale Managed Fund. The court’s orders resolve the CFTC’s September 2021 action against Dapkus and the Tradewale entities.
The September 2021 complaint alleged that in soliciting members of the public to trade, Tradewale made various material misrepresentations and omissions. Among them, the entity said they had a “unique trading system” using “artificial intelligence” to trade forex. Tradewale also claimed it generated average monthly returns of 4 percent to 11 percent and average yearly returns of over 55 percent with “minimal risk.”
In addition, the complaint alleged that most, if not all, of Tradewale’s customers in the United States were never able to withdraw funds from their accounts. Instead, the defendants allegedly misappropriated customer funds for unauthorized purposes, including misappropriation of funds in bank accounts that Dapkus established and was the sole signatory.
They found all defendants liable for fraudulently soliciting members of the public for investments in a purported retail off-exchange foreign currency fund managed by Tradewale and misappropriating investor funds.
In addition, the Tradewale entities were found liable for failure to register as commodity trading advisors (CTA).
As a result, Dapkus and the Tradewale entities are required to pay $713,520 in restitution and a $2,140,560 penalty. The orders also impose permanent injunctions on Dapkus and the Tradewale entities, barring them from trading on CFTC-regulated markets, among other restrictions.
The Division of Enforcement staff responsible for this matter are Katie Rasor, Lara Turcik, Christopher Giglio, David MacGregor, Lenel Hickson, and Manal Sultan.