CFTC seeks entry of default in FX fraud case against VOS Capital Management and Dominick Carducci
The defendants have not responded to the CFTC’s complaint, the US regulator says.
The United States Commodity Futures Trading Commission (CFTC) has filed a set of documents with the New York Southern District Court with regards to the action taken by the regulator against VOS Capital Management, LLC and its principal Dominick Vincent Carducci.
Today, the CFTC has submitted proposed clerk’s certificates of default as to VOS Capital Management and Carducci. The documents, seen by FinanceFeeds, note that the CFTC’s action was commenced on September 9, 2019 with the filing of a summons and complaint, a copy of the summons and complaint was served on the defendants. However, the defendants have not filed an answer or otherwise moved with respect to the complaint. Hence, the CFTC asks that the Court’s clerk notes the default of Dominick Vincent Carducci and VOS Capital Management.
According to the CFTC Complaint, from at least August 2016 through in or about September 2018 (the Relevant Period), the defendants operated a fraudulent scheme in which they solicited, accepted and misappropriated funds for a pooled investment vehicle in off-exchange leveraged or margined Forex contracts.
Carducci, as an officer and agent of VOS Capital, is alleged to have knowingly made fraudulent and material misrepresentations and omissions, in both conversations and written communications, about his FX trading and returns to persuade at least thirty individuals to transfer at least $1.1 million to the defendants for the purpose of participating in a pooled forex investment vehicle.
The CFTC says that VOS Capital and Carducci have engaged, are engaging, or are about to engage in acts and practices in violation of a number of sections of the Commodity Exchange Act, and rules of Commission Regulation, which prohibit fraud in connection with forex transactions and fraud by a commodity pool operator (CPO).
In addition, VOS Capital acted at all times during the Relevant Period as a CPO by operating or soliciting funds for a pooled investment vehicle that is not an eligible contract participant (ECP) and that engages in retail FX transactions, without being registered with the Commission as a CPO, as required by the Act and Regulations. In particular, VOS Capital’s failure to register as a CPO violated Sections 2(c)(2)(C)(iii)(I)(cc) and 4m(1) of the Act, 7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc), 6m(1) (2012), and Regulation 5.3(a)(2)(i), 17 C.F.R. § 5.3(a)(2)(i) (2018).
Carducci solicited funds for participation in a pooled investment vehicle for the purpose of trading in off-exchange leveraged or margined forex contracts, while associated with VOS Capital as an officer, employee, or agent, without being registered with the Commission as an associated person (AP) of VOS Capital, as required by the Act and Regulations. Specifically, Defendant Carducci’s failure to register as an AP of a CPO violated Sections 2(c)(2)(C)(iii)(I)(cc) and 4k(2) of the Act, 7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc), 6k(2) (2012), and 17 C.F.R. § 5.3(a)(2)(ii).
The CFTC seeks civil monetary penalties and remedial ancillary relief, including, but not limited to, trading and registration bans, restitution, disgorgement, rescission, pre- and post- judgment interest, and such other and further relief as the Court may deem necessary or appropriate.