CFTC hits Silver Star FX and its owner with $15.6 million fine
A Georgia resident and two defunct firms will pay $15.6 million to settle CFTC’s allegations that they operated illegal FX trading schemes, provided fraudulent misrepresentations, and acted as unregistered commodity pool operators.
The Commodity Futures Trading Commission hit Silver Star FX, Silver Star Live Software LLC (SSLS) and its co-owner David Wayne Mayer with fraud charges and registration lapses for promoting passive returns through their forex trading bot.
The US securities regulator provided the following breakdown for the hefty fines:
“The order requires SSLS and Mayer to pay $3,712,035.93 in restitution jointly and severally and SSL to pay $198,143.03 in restitution. The order further imposes $9,798,107.79 in civil monetary penalties on SSLS; $9,798,107.79 on SSL; and $1,338,000 on Mayer.”
Along with the civil penalty, the defendants also agreed to a permanent bar from trading in regulated markets and registration with the CFTC, according to a proposed consent order.
The two firms, which were registered in New Mexico and Florida, sold their trading and teaching system to investors in the US and elsewhere. The third defendant, David Wayne Mayer – aka “Quicksilver,” is founder and COO.
Mayer claimed he had worked for the second largest hedge fund in New York, Platinum Partners, where he was responsible for trading accounts of hundreds of millions in the futures market over the course of 6 years.
Even if it was true, Platinum Partners was liquidated by authorities and all of its operatives were hit by conspiracy and securities fraud charges. Prosecutors said the defunct hedge fund operated like a Ponzi scheme that bilked investors out of millions of dollars.
The CFTC’s complaint also involves charges that, from July 2018 to March 2019, the defendants fraudulently solicited retail investors to purchase their FX day-trading system by misrepresenting the software’s effectiveness.
Defendants sold the ‘double your money’ software for $199 and then $145 a month to provide users with access to the auto trading bot and other personalized trading advice.
The claims to bolster the credibility of their system included that it generates $250-600 a month profit for as little as $300 deposit. Further, they falsely claimed their software relies on algorithms with a proven track record to make these purported profits.
In a separate case, the CFTC fined Silver Star FX and two co-owners, who were identified as Candace Ross-Mahmoud and Hassan Mahmoud, with penalties totaling $75,000. In their respective Silverstar Live corporate bios, Hassan Mahmoud was credited as “an international entrepreneur and keynote speaker who is highly sought out by the millennial community to work with and to work on passion projects all over the world.” He also claims to have done over $250 million in sales while helping multiple business owners grow their names and brands.