CFTC charges Technical Trading Team in $5M forex scam

The complaint alleges that they engaged in a fraudulent scheme that netted nearly $5 million from at least 27 retail investors. However, they incurred massive losses while trading forex on a leveraged basis, misappropriated funds for personal use, and used the money collected to pay back to early investors.

Per the statement, Edwin Carrion and Jason Rodriguez, along with Technical Trading Team, LLC (TTT), fraudulently solicited individuals who were not eligible to trade forex on margin. Additionally, they are charged with acting as commodity trading advisors and associated persons without obtaining the required registrations. Furthermore, the defendants didn’t provide the required disclosures concerning client testimonials on the Denari website, nor the hypothetical disclaimer required by CFTC regulations.

To create the illusion of stability, the defendants promised their victims high annual interest rates and the return of their principal investments. To entice investors, they exaggerated their forex trading track record, misrepresented risk management practices, and then claimed they would recoup losses and repay the loans by using an AI-based “bot” for trading. The CFTC said that these representations were false or misleading.

“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 Director of Enforcement Ian McGinley. “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.”

In addition to the false representations, the commission contends that the duo personally claimed they experience for several years in actual trading and investing in futures when in fact they were not. Furthermore, the CFTC said the defendants did not know whether participants who put up their money in the pool were qualified or not.

The CFTC seeks civil monetary penalties, 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 and CFTC regulations.