Court Orders Tradewale and Its Founder to Pay a $2.8M Fine over Deceptive Forex Scheme
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Valdas Dapkus and his two companies have been ordered by a US federal court to pay more than $2.8 million in monetary sanctions. The fine follows charges of the companies being involved in a fraudulent forex fund scheme.
According to the US Commodity Futures Trading Commission (CFTC0), the fine was imposed by a court for the district of New Jersey.
The $2.8 million fine was imposed against Dapkus, Tradewale LLC, and Tradewale Managed Fund. The court found these entities culpable of soliciting money from investors using an FX trading fund. The fund also used false claims and misappropriated investor money.
Deceptive Forex Scheme
The court found that the defendants made inaccurate statements about Tradewale, claiming it had a unique trading system. The company claimed to use artificial intelligence to generate high returns from investors, which was false.
Investors who allocated money to the scheme were eventually unable to access or withdraw their funds from the platform. According to the CFTC, Tradewale often promoted itself as a low-risk investment platform.
“Tradewale also claimed it generated average monthly returns of 4%-11% and average yearly returns of over 55% with ‘minimal risk,” the CFTC said.
Court Imposes an Over $2.8M Fine
The court has also ordered the defendants to pay $713,520 in restitution to the investors affected by the scheme. The company has also been ordered to pay $2.14 million in civil monetary penalty.
Dapkus and Tradewale have also received a permanent ban preventing them from trading or violating commodity trading laws.
The judgment has now resolved an enforcement action filed by the CFTC in September 2021, which charged the defendants with fraud, misappropriation of funds, and operating without the necessary registration.
The complaint states that none of the around 17 Tradewale investors obtained returns after investing with the fund. The accused misappropriated more than $700,000 worth of investor funds. According to the CFTC, this judgment does not necessarily mean investors will recover their stolen funds.
“The CFTC cautions that orders requiring repayment of funds to victims may not recover any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable,” it said.
This judgment comes amid a prevalence of fraud cases in the US forex market, with reported scams being more severe than previously reported.
