Nadex bans owner of fraudulent FX firm VOS Capital Management - FinanceFeeds

Nadex bans owner of fraudulent FX firm VOS Capital Management

Maria Nikolova

During his tenure as a Nadex member, Dominick Carducci failed to timely inform Nadex that he was a party to regulatory and criminal matters.

North American Derivatives Exchange (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has banned Dominick Carducci, president and sole owner of fraudulent FX firm VOS Capital Management.

The Nadex Compliance Department commenced an investigation into Dominick Carducci after it received information regarding his regulatory and criminal background. Specifically, the Compliance Department was notified that the Commodity Futures Trading Commission (CFTC) had filed a Complaint in the Southern District of New York against Carducci and VOS Capital Management, LLC.

The Complaint charged Carducci with fraud and misappropriation in connection with the unlawful operation of a commodity pool that purported to trade leveraged or margined Forex. Further, the CFTC Complaint alleged fraudulent solicitation of at least 30 commodity pool participants, as well as the misappropriation of over $1.1 million of pool funds that Carducci used to reimburse participants, and for his personal use, such as international travel, luxury automobiles, and student loan debt.

On June 23, 2020, the CFTC filed a motion for and was granted a default judgement against Carducci and VOS Capital Management, LLC due to his failure to answer or dispute the CFTC’s Complaint. As a result of the default judgement, both Carducci and VOS Capital Management, LLC were permanently restrained, enjoined and prohibited from directly or indirectly engaging or trading with any registered entity. Additionally, Carducci was assessed a civil monetary penalty of $2,861,625.00, and ordered to pay restitution in the amount of $953,875.00 to pool participants affected by his fraudulent scheme.

Further, prior to the CFTC Complaint, on May 14, 2019, the United Stated Attorney for the District of South Carolina filed a grand jury indictment against Carducci. The criminal indictment alleged that between December 2015 and July 2018, Carducci knowingly devised a scheme and artifice to defraud in representing to potential investors that he could earn substantial returns for them in the FX market. Additionally, the indictment also alleged that Carducci used investor money to fund his lifestyle, created false account statements showing large gains, emailed these statements to investors, and operated a Ponzi scheme.

On November 4, 2019, Carducci entered a plea of guilty on one of the three counts in the aforementioned indictment, with the other two counts dismissed by the U.S. Attorney. On June 19, 2020, Carducci was sentenced to 24 months’ imprisonment and ordered to pay more than $953,875 in restitution.

During his tenure as a Nadex member, Carducci failed to timely inform Nadex that he was a party to regulatory and criminal matters and subsequent penalties imposed as a result of default judgment. Also, Carducci failed to comply with this investigation when he did not respond to the Compliance Department’s request for information regarding these matters.

Carducci was found to have violated Nadex Rules 3.3(d)(i), (ii), (iv) and (v) when he failed to timely apprise Nadex of the aforementioned criminal conviction and penalties imposed therein, as well as the regulatory disciplinary action with the CFTC. In addition, the Compliance Department concluded that Carducci violated Rule 3.3(a) and Member Acknowledgements and Authorizations, Section (h) of the Nadex Membership Agreement when he failed to cooperate with the Compliance Department’s inquiry regarding these matters.

As a result of the aforementioned violations, Dominick Carducci’s Nadex Membership has been revoked, his account terminated, and he has been permanently banned from trading on Nadex Markets, either directly for his own account or through an intermediary, or as an authorized trader on behalf of any other account.

The notice is effective September 15, 2020.

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