Release Number 6005-11

March 21, 2011

CFTC and State of California Charge The Trade Tech Institute, Inc., Technology Trading International, Inc., Robert Sorchini and Richard Carter with Fraudulently Soliciting More than 600 Managed Commodity Trading Accounts

Federal court issues order freezing defendants’ assets and preserving books and records related to the alleged multi-million dollar promotion of purportedly profitable trading systems.

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that a federal court in Los Angeles entered a restraining order against defendants The Trade Tech Institute, Inc. (Trade Tech), Technology Trading International, Inc. (Tech Trading), Robert Sorchini and Richard Carter, freezing defendants’ assets, prohibiting the destruction or alteration of their books and records and requiring defendants to provide an accounting of all funds and assets under their control.

The order stems from a joint action filed by the CFTC and the Commissioner of Corporations of the State of California (State) under seal on March 15, 2011, in the U.S. District Court for the Central District of California, charging the defendants with fraudulently promoting and selling to the public several commodity trading systems pursuant to which customer managed accounts would be traded, in violation of the Commodity Exchange Act and California law.

The complaint specifically alleges that, since at least 2007 and continuing through the present, Trade Tech, by and through Carter, Sorchini and others, actively promoted and marketed a variety of systems to the public to be used for trading futures contracts and options on futures contracts in managed accounts. Trade Tech’s systems include Trade Tech Analytics, Paradigm, Optimum, Expeditor, MAC, Hybrid, Daytona and Pioneer.

The CFTC complaint further alleges that beginning in April 2010, Sorchini, Carter and others formed Tech Trading to continue their fraudulent promotion and selling of systems.

According to the complaint, while selling these systems, Trade Tech, Tech Trading and Sorchini made fraudulent representations to prospective and current clients about the systems’ purported past and potential future profitability and track records, failed to adequately warn clients of the risks inherent in trading futures and options, failed to disclose to clients the systems’ losing performance records in client managed accounts and made fraudulent performance-based guarantees. In addition, Trade Tech allegedly publishes a misleading testimonial on its website and fails to inform clients or obtain clients’ consent when switching clients’ managed accounts between systems.

Trade Tech and Tech Trading have together received more than $4.5 million in fees from clients from the sale of their systems and continue to receive additional fees from ongoing sales. In addition, Trade Tech and Tech Trading allegedly directed the opening of more than 600 managed accounts for execution of their systems and continue to direct the opening of new managed accounts for their clients.

U.S. District Court Judge Audrey B. Collins ordered defendants to appear in court on March 28, 2011, for a preliminary injunction hearing.

In its continuing litigation, the CFTC and the State seek a return of ill-gotten gains, restitution to defrauded customers, civil monetary penalties and permanent injunctions against further violations of the federal commodities laws and California law.

The CFTC has set up a special call-in number for Trade Tech and Tech Trading clients to leave messages for the CFTC Division of Enforcement. The number is (816) 960-7762.

The CFTC appreciates the cooperation of the California Department of Corporations in bringing this matter. The CFTC further acknowledges the assistance of the Securities and Exchange Commission, which has charged Carter and his company Spyglass Equities Systems, Inc. in a related enforcement action filed in federal court in the Central District of California.

The following CFTC Division of Enforcement staff members are responsible for this case: Jeff Le Riche, Jo Mettenburg, Peter Riggs, Jennifer Chapin, Stephen Turley, Rick Glaser and Richard Wagner.

Media Contact
Dennis Holden
202-418-5088

Last Updated: March 23, 2011