CFTC hits GDLogix owner with $3.5 million fine

abdelaziz Fathi

Daniel Winston LaMarco, the mastermind behind a Forex Ponzi scheme, must pay the CFTC $3.5 million in penalty and restitution after a federal judge in New York entered a default judgment against him.

In a complaint filed in 2017, the US Commodity Futures Trading Commission accused the New York-based Forex scheme operator for fraudulently soliciting nearly $1.5 million from investors to trade in foreign currency.

According to the complaint, Daniel Winston LaMarco and his company GDLogix Inc. fraudulently solicited the money from investors by guaranteeing pool participants a monthly return on their investment based on profits purportedly earned from trading off-exchange margined retail derivatives forex contracts.

As a result, at least 13 pool participants gave the defendants a total of $1,492,650 to trade in their purported forex pool.

Defendants falsely told their customers, among other lies, that they offer a safe investment with steady and guaranteed returns. “LaMarco solicited pool participants by falsely representing to them the purported success of his personal investments in Forex Trading and the purported safety of his forex investment strategy,” the agency said.

Many of the victims, which included friends and acquaintances of LaMarco, sought higher monthly income on their savings, the CFTC said. But the agency alleges that the pool never generated any income from trading forex, as in reality LaMarco lost nearly all of the pool participants’ funds.

In order to shore up the fraud, LaMarco allegedly provided fabricated account statements which claimed to pool participants that GDLogix generated strong investment returns and that the value of his commodity pool increased to $1.8 million.

During that time, the defendants solicited pool participants by word of mouth, emails, and websites, among other means, the complaint says.

The CFTC has asked the court to provide full restitution to defrauded pool participants, disgorgement of ill-gotten gains and the payment of appropriate civil monetary penalties. In addition to fiscal penalties, it also asked for the imposition of permanent registration, trading bans and a permanent injunction from future violations of federal commodities laws.

Read this next

Interviews

Exberry’s Guy Melamed on paradigm shift with cloud-native exchanges at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Guy Melamed about Exberry’s cloud-native exchange SaaS platform certified by AWS to bring about a paradigm shift in the industry at a time of cybersecurity concerns.

Retail FX

Playtech revenue grows to €1.60 billion in 2022

Playtech plc (LSE: PTEC) reported solid financial results for the fiscal year 2022 as B2B growth and Snaitech’s record performance pushed it towards large gains in revenue and net profit.

Digital Assets

Terra founder Do Kwon arrested in Montenegro

Terra (LUNA) co-founder Do Kwon, the South Korean entrepreneur facing charges over the $40 billion wipeout of the stablecoins he created, was reportedly arrested in the region of Podgorica, Montenegro.

Metaverse Gaming NFT

Orbs Ecosystem Developers Launch TON Access To The Public

The TON Access service provides reliable and decentralized RPC nodes to decentralized applications (dApps).

Digital Assets

Bybit celebrates listing of Arbitrum (ARB) token with $400K prize pool

“At Bybit, we recognize our responsibility to provide forward-thinking opportunities for our users and lead the way in supporting the proliferation of cryptocurrency and blockchain technology.”

Digital Assets

StormGain launches StormGain DEX, a non-custodial alternative to its centralized exchange

StormGain DEX becomes accessible once a user connects their own non-custodial wallet and trades directly, with all orders settled on-chain.

Retail FX

OANDA launches CFDs on UK and US stocks for retail clients in emerging markets

“Interest in CFDs has been surging globally as they offer traders and investors the opportunity to profit from price changes without owning the underlying assets. CFDs give exposure to markets that are trending downward as well as upward, allowing traders to take positions even when volatility is high.”

Institutional FX

Bitpanda’s stocks, commodities, crypto now available to banks partnered with Visa

“We are excited to welcome Bitpanda to Visa’s Fintech Partner Connect Program. The partnership will assist banks to integrate an asset trading platform for crypto and other assets within their banking app.”

Industry News

Exchanges agree on global framework for designating stocks and shares as green

“Investors should be able to have greater visibility of issuers who have green activities in a way that is rigorous and that counters greenwashing. Exchanges strive to bring clarity, consistency, and rigor to the concept of green and to counter greenwashing.”

<