CFTC Charges California-Based Vendor with Fraud Over Trading Software

CFTC seeks full restitution, disgorgement of ill-gotten gains and to bar fraudsters from the industry.

On Wednesday, the U.S. Commodity Futures Trading Commission (CFTC), the ‎independent agency that regulates futures and options markets, announced that it ‎has obtained a civil enforcement action charging Mirko Schacke and his company with fraud and failing to register with the CFTC.

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The U.S. derivatives regulator says that Mirko Schacke of Antioch, California, and his company, TradeMasters USA, LLC, of Las Vegas, Nevada, fraudulently solicited at least 36 individuals to purchase a futures trading software, TradeMasters, raking in a total of $155,626 by misrepresenting the software’s effectiveness. Defendants sold the ‘double your money’ software for as little as $1,500 and as much as $20,000.

In connection with the promotion of the software, TradeMasters and its principal Mirko Schacke made a series of materially false claims through TradeMasters public website and on YouTube videos. Specifically, the claims to bolster the credibility of their system included that one customer earned 300% in just three months, while most of other users generated a monthly income of $5,000 to $10,000.

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In addition to false representations, the commission contends that Schacke personally executed trades for at least two clients who had complained that the software was not generating profits as advertised.

CFTC allowed to inspect the books

TradeMasters and Schacke are also charged with acting as a commodity trading advisor and an associated person without obtaining the required registrations. Furthermore, the defendants didn’t provide the required disclosures concerning client testimonials on the TradeMasters website.

The watchdog complaint was filed on August 15, 2016. And on the same day Chief Judge Gloria M. Navarro from the U.S. District Court of Nevada issued a restraining order prohibiting the defendants from destroying business records and granting the CFTC immediate access to such records.

The court scheduled a hearing for August 26, 2016, on the CFTC’s separate motion for a preliminary injunction.

In addition to the fiscal penalties, including full restitution to defrauded investors, the commission seeks “permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws,” as charged.

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