The Commodity Futures Trading Commission (CFTC) announces that the U.S. District Court for the Southern District of Florida entered a consent order today imposing a permanent injunction, damages and a civil monetary penalty against Empires Consulting Corp., a Florida company that managed commodity pools based on its name EmpiresX.
The order finds, among other things, that Empires Consulting defrauded participants in illegally operating commodity pools without registering as required and commingled participants’ funds. The order resolves the CFTC’s June 30, 2022 claims against Empires Consulting.
Under the terms of the order, Empires Consulting is ordered to pay $32,178,397 in restitution and an equal civil monetary penalty, totaling $64,356,794 in penalties. The order also permanently enjoins Empires Consulting from engaging in further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The order stems from the CFTC’s June 2022 complaint charging Empires Consulting, along with its founders, Emerson Pires and Flavio Goncalves, and chief trader Joshua Nicholas, with a scheme to defraud EmpiresX participants.
The complaint alleges that beginning around September 2020, Empires Consulting used the company’s website and videos posted on social media platforms to induce individuals (participants) to trade commodity futures, options and digital assets. items with EmpiresX. Pool participants were purportedly able to participate either through a “private investment” pool account managed directly by the company’s lead trader or through a pool account purportedly traded by an automated “EX Bot” that trades based on its trades chief merchant.
The order finds that Empires Consulting fraudulently obtained approximately $100 million from pool participants. According to the order, Empires Consulting, through its officers and employees, knowingly made false claims to prospective pool participants regarding its enrollment status, use of participant funds, pool size and pool returns. participants.
The order also finds that Empires Consulting commingled and misappropriated participant funds and on or about November 2021, stopped responding to participant withdrawal requests.
The CFTC’s action against the individual defendants is ongoing.