Release Number 7415-16
August 1, 2016
Federal Court Orders California Resident Ghassan Tawachi and His Firm, Intelligent Trades, LLC, to Pay in Total Nearly $1.5 Million in Disgorgement and a Monetary Penalty for Defrauding Clients through a Bogus Commodity Futures Trading System
Order Imposes Permanent Trading and Registration Bans on the Defendants
Order also Finds that Tawachi Violated a 2012 CFTC Order that Prohibited Him from Commodity Futures Trading
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Consent Order for Permanent Injunction against Defendants Ghassan Tawachi of Irvine, California, and his firm, Intelligent Trades, LLC, a Florida limited liability company, requiring them to jointly and severally disgorge $479,755 of ill-gotten gains and pay a $1 million civil monetary penalty for defrauding clients through the operation of a commodity futures software trading system. In addition, the Order finds that Tawachi acted as a Commodity Trading Advisor without being registered with the CFTC as required by the Commodity Exchange Act (CEA).
The Order also permanently prohibits the Defendants from trading on any registered entity (as defined in the CEA) and from registering with the CFTC, and also permanently bars them from engaging in any commodity-related activities. The Order also requires them to cease and desist from violating the provisions of the CEA, as charged.
The Order, entered on July 29, 2016, by Judge Andrew J. Guilford of the U.S. District Court for the Central District of California (Santa Ana), arises out of the CFTC enforcement Complaint filed on January 7, 2016 (see CFTC Complaint and Press Release 7304-16). The Order also finds that Tawachi violated a 2012 CFTC Order that prohibited him from commodity futures trading after finding he had engaged in fraud and misappropriation and imposes a permanent injunction against further violations of the 2012 CFTC order (see CFTC Complaint and Press Release 6243-12).
According to the Order, beginning in July 2011 until at least July 30, 2012, Defendants induced clients to pay a 10% monthly fee to use Tawachi’s software trading system to trade commodity futures through various false claims about the alleged profitability of the trading system and Tawachi’s alleged successful trading background. Clients, whose accounts were traded according to the software futures trading system, paid $479,000 in fees directly to the Defendants, who controlled the clients’ trading, the Order finds. While Tawachi maintained the trading system could produce profits up to 20% a month, in actual trading the software failed to produce any profits for clients, according to the Order.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC appreciates the cooperation of the U.S. Attorney’s Office for the Central District of California.
CFTC Division Enforcement staff members responsible for this case are Michael Amakor, Thomas J. Kelly, James H. Holl, III, Peter M. Haas, and Paul G. Hayeck.
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CFTC’s Fraud Advisories
The CFTC has issued several customer protection Fraud Advisories that provide warning signs of fraud, including the Commodity Trading Systems Sold on the Internet Advisory, which helps customers identify this potential fraud.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: August 1, 2016