Release Number 8417-21
Federal Court Orders Georgia Man and Two Companies to Pay Over $15.6 Million for Forex Fraud and Registration Violations
August 25, 2021
Washington, D.C. — The Commodity Futures Trading Commission announced today that the U.S. District Court for the Northern District of Georgia entered an order granting the CFTC’s motion for entry of default judgment against defendants Silver Star FX, LLC d/b/a Silver Star Live (SSL), a former New Mexico limited liability company, Silver Star Live Software LLC (SSLS), a Florida limited liability company, and David Wayne Mayer (known by the pseudonym “Quicksilver”) of Roswell, Georgia. The order finds that all three defendants are liable for solicitation fraud in connection with forex transactions, Commodity Trading Advisor (CTA) fraud, as well as multiple CFTC registration violations.
The order requires SSLS and Mayer to pay $3,712,035.93 in restitution jointly and severally and SSL to pay $198,143.03 in restitution. The order further imposes $9,798,107.79 in civil monetary penalties on SSLS; $9,798,107.79 on SSL; and $1,338,000 on Mayer. Additionally, under the order, defendants are permanently enjoined from engaging in conduct that violates the Commodity Exchange Act (CEA), registering with the CFTC, and trading in any CFTC-regulated markets.
The order resolves a CFTC enforcement case filed on June 11, 2020. [See CFTC Press Release No. 8179-20]
In the order, U.S. District Judge Robert P. Boulee found that from at least July 2018 to March 2019, the defendants fraudulently solicited customers to open discretionary trading accounts, and offered to trade those accounts, through a fully automated retail foreign currency (forex) trading software system that Mayer created. The order further finds that the defendants solicited customers through online videos, social media, and in-person marketing events. As found in the order, the solicitations contained material misrepresentations and omissions regarding Mayer’s qualifications and trading experience. Additionally, as found in the order, the defendants misrepresented the forex trading system’s performance history and expected trading profits. Further, as found in the order, the defendants failed to disclose that Mayer never opened a live trading account using the forex trading system. The order further found that Mayer failed to register as an associated person of a CTA; and that SSL and SSLS unlawfully permitted Mayer to become or remain associated with them.
Related CFTC Enforcement Action
In a previous, related case, the CFTC found that SSL and SSLS acted as unregistered CTAs, and that two former officers acted as unregistered associated persons of both SSL and SSLS. [See CFTC Press Release No. 8071-19]
The Division of Enforcement staff members responsible for this case are James A. Garcia, Michael Loconte, Erica Bodin, Aimée Latimer-Zayets, and Rick Glaser.
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CFTC’s Foreign Currency (Forex) Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency (Forex) Trading Fraud Advisory, to help customers identify this sort of scam.
The CFTC also strongly urges the public to verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.