Release Number 8742-23
Federal Court Orders Four Feeder Fund Operators and Their Principals to Pay Over $10 Million in Restitution and Penalties for Forex Fraud
July 05, 2023
Washington, D.C. The Commodity Futures Trading Commission today announced Judge Carlos Mendoza of the U.S. District Court for the Middle District of Florida entered consent orders against Florida residents Surujpal Sahdeo, Daniel Cologero, and Randy Rosseau and New Jersey resident Hemraj Singh, and their respective companies SR&B Investment Enterprises, Inc., Green Knight Investments, LLC, Bull Run Advantage, LLC, and King Royalty, LLC, whose feeder funds operated as commodity pool frauds against their customers. The defendants also failed to register with the CFTC, as required by the Commodity Exchange Act (CEA), and violated CFTC regulations relating to commodity pools operations.
For these defendants, the orders resolve a September 9, 2020 complaint. [See CFTC Press Release No. 8246-20] The complaint was later amended, but is still pending against another individual and company.
Each of the orders requires the feeder fund operators and their companies pay restitution to their clients with Singh and King Royalty ordered to pay $5,478,837; Sahdeo and SR&B $711,877; Rosseau and Bull Run $215,719; and Cologero and Green Knight $175,378. The orders also assess civil monetary penalties of $1,500,000 against Singh and King Royalty; $1,750,000 against Sahdeo and SR&B; $500,000 against Cologero and Green Knight; and $75,000 against Rosseau and Bull Run.
Additionally, the orders enjoin them from further violations of the CEA and CFTC regulations, as charged, and impose permanent trading and registration bans.
The orders find the four individuals and their companies operated “feeder” funds that solicited funds from retail pool participants, pooled those funds in company bank accounts, and sent some or all of the funds to a master pool to trade forex on their behalf. The master pool collected almost $58 million from investors and feeder funds, but used less than $2.5 million for actual forex trading. The master pool sent statements to investors and feeder funds falsely showing profits and no losses. The feeder funds, in turn, issued statements to their investors based on the master pool statements they received showing fictitious profits; thus, their feeder funds operated as frauds.
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 acknowledges and thanks the National Futures Association, the Cyprus Securities and Exchange Commission, the United Kingdom Financial Conduct Authority, and the Australian Securities and Investments Commission for their assistance in this matter.
The Division of Enforcement staff responsible for this action are Susan B. Padove, Joy H. McCormack, Ray Lavko, Stacie Pan, Phillip Johnson, Elizabeth M. Streit, Scott R. Williamson, Robert T. Howell, and former employee Cristina Covarrubias.
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CFTC’s Commodity Pool and Forex Fraud Advisories
The CFTC has issued several customer protection Fraud Advisories and Articles that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools, and the Forex Trading Fraud Advisory, to help customers identify these scams.
The CFTC also strongly urges the public to verify a company’s registration with the CFTC 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.