On October 9, the U.S. Commodity Futures Trading Commission (CFTC) announced an order of default judgment, finding that Michael Salerno and his companies Black Diamond Forex LP, BDF Trading LP, and Advanta FX engaged in a foreign currency (forex) trading scheme. The CFTC claims Salerno and his companies fraudulently solicited members of the public to become forex traders, and the company is to pay more than $1.2 million in penalties. Qualified whistleblowers may now submit award claims for the case.
The CFTC charged Salerno and his companies with fraudulent misrepresentations and misuse of funds. The charges allege that in 2017, Salerno and his companies solicited individuals on websites such as LinkedIn and Indeed.com to become forex traders. Salerno and his companies allegedly misrepresented Salerno’s own success in trading forex. Additionally, the defendants allegedly required prospective traders to make a risk deposit, which they falsely promised to match. Lastly, the defendants allegedly falsely promised to share a portion of the trading profits and to pay performance bonuses.
The U.S. District Court for the Eastern District of Pennsylvania entered an order which “requires the defendants to pay $335,149 in restitution and a civil monetary penalty of $894,000, and also requires that Black Diamond Investment Group pay $1,488 in disgorgement.” The order also permanently enjoins Salerno from trading in any CFTC-regulated market.
On October 14, the CFTC posted a Notice of Covered Action in reference to the case. The Notice states that the CFTC “hereby gives notice that individuals may submit whistleblower award claims within 90 days from today’s date.” Qualified CFTC whistleblowers, individuals who voluntarily submit original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recouped by the government. The CFTC Whistleblower Program additionally provides anti-retaliation protections, including confidentiality, for whistleblowers.
According to the CFTC, “since issuing its first award in 2014, the CFTC has awarded approximately $120 million to whistleblowers. CFTC actions associated with those awards have resulted in monetary relief totaling nearly $950 million.”