The Commodity Futures Trading Commission (CFTC) announces the U. S. District Court for the Southern District of Florida entered a consent order today imposing a permanent injunction, restitution, and civil monetary penalty against Empires Consulting Corp., a Florida corporation that operated commodity pools under the name EmpiresX.
The order finds, among other things, Empires Consulting defrauded participants in unlawfully operated commodity pools without being registered as required and commingled participant funds. The order resolves the CFTC’s June 30, 2022 claims against Empires Consulting.
Under the terms of the order, Empires Consulting is required to pay $32,178,397 in restitution and a civil monetary penalty in the same amount, totaling $64,356,794 in fines. The order also permanently prohibits Empires Consulting from engaging in further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The order stems from the CFTC’s June 2022 complaint charging Empires Consulting, along with its founders, Emerson Pires and Flavio Goncalves, and head trader Joshua Nicholas with a scheme to defraud EmpiresX pool participants.
The complaint alleges, beginning in approximately September 2020, Empires Consulting used the company’s website and videos posted on social media platforms to solicit individuals (pool participants) to trade commodity futures, options, and digital assets with EmpiresX. Pool participants had the alleged ability to participate either through a “private investment” pool account directly managed by the company’s head trader or through a pool account purportedly traded by an automated “EX Bot” that traded based on the head trader’s trading.
The order finds Empires Consulting fraudulently obtained approximately $100 million from pool participants. According to the order, Empires Consulting, through its officers and employees, knowingly made false claims to prospective pool participants regarding its registration status, the use of participant funds, the size of the pools, and participant returns.
The order also finds Empires Consulting commingled and misappropriated participant funds, and in or around November 2021, stopped honoring participant withdrawal requests.
The CFTC’s litigation against the individual defendants continues.
