The Compliance Department of the North American Derivatives Exchange, Inc. (Nadex) has recently published a notice of disciplinary action against one of its members, Dominick Carducci, following a complaint being filed against Carducci and his affiliated entity, VOS Capital Management, LLC by the Commodity and Futures Trading Commission (CFTC).
In particular, following an investigation by Nadex, Carducci’s membership has been revoked by the exchange and his account has been terminated effective from 15th September 2020. Furthermore, he has been permanently banned from trading on Nadex Markets.
Nadex commenced an investigation into Carducci after discovering that the CFTC filed a Complaint in the Southern District of New York against Carducci and his affiliated entity, charging him with fraud and misappropriation in connection with the unlawful operation of a commodity pool that claimed to trade leveraged or margined foreign exchange (forex).
As part of its complaint, the commodity regulator alleged that Carducci fraudulently solicited at least 30 commodity pool participants and misappropriated more than $1.1 million of pool funds. The regulator claimed that Carducci used these funds to reimburse participants, like a Ponzi scheme, and for his own personal use ranging from international travel, luxury cars and student loan debt.
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CFTC Granted a Default Judgement against Carducci
On 23rd June 2020, the CFTC filed a motion for and was granted, default judgement against Carducci and VOS Capital Management, LLC after they failed to answer or dispute the regulator’s complaint.
As part of the default judgement, Carducci and his company were permanently restrained, enjoined and prohibited from directly or indirectly engaging in trading with any registered entity.
Carducci was given a civil monetary penalty of $2,861,625. He was also ordered by the Court to pay restitution in the amount of $953,875 to the victims of his scam.
Carducci Failed to Comply with Nadex Investigation
“During his tenure as a Nadex member, Carducci failed to timely apprise Nadex that he was a party to the aforementioned regulatory and criminal matters and subsequent penalties imposed as a result of default judgment,” Nadex said in its disciplinary action.
“In addition, Carducci failed to comply with this investigation when he did not respond to the Compliance Department’s request for information regarding these matters.”