The Commodity Futures Trading Commission (CFTC) today announced a civil enforcement action in the U.S. District Court for the District of Oregon against SimTradePro Inc., an Oregon corporation, and its founder, Robert L. Adams.
The complaint alleges the defendants defrauded more than 100 U.S. customers out of at least $2.3 million; acted as an unregistered commodity pool operator and commodity trading advisor; failed to make the required disclosure regarding simulated or hypothetical trading results; and Adams acted as an unregistered associated person of an introducing broker.
As alleged in the complaint, from at least February 2018 to April 2019, the defendants solicited at least $2.3 million from more than 100 pool participants that they subsequently used to trade leveraged Forex and metals on the pool participants’ behalf.
As further alleged in the complaint, the defendants failed to disclose introducing broker fees they were being paid while repeatedly claiming to customers they would not be paid until the pools made money, there were no other fees, and that they were covering the pools’ expenses out of their own funds.
Additionally, the defendants misled customers as to the reasons for leveraged gold trading losses and their own role, without consulting customers, in locking-in these significant losses by the pools that ultimately lost approximately $2 million of the pool participants’ money.
As alleged in the complaint, the defendants acted as a commodity pool operator by soliciting, accepting, and receiving funds to trade in leveraged Forex and leveraged metals while also, for compensation or profit, providing trading advice to the pools without being registered as a commodity trading advisor.
Further, the complaint alleges the defendants did not provide the requisite disclosure regarding simulated or hypothetical trading results, and that Adams acted as an associated person of an introducing broker but failed to register with the CFTC as required.
The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
