January 7, 2016
CFTC Charges Irvine, California Resident Ghassan Tawachi and His Company, Intelligent Trades, LLC, with Defrauding Customers in Connection with a Commodity Futures Trading System
Tawachi also Charged with Violating an Earlier CFTC Anti-Fraud Order and Acting as a Commodity Trading Advisor without Being Registered as Such with the CFTC
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) filed a civil anti-fraud enforcement action in the U.S. District Court for the Central District of California charging Defendants Ghassan Tawachi (a/k/a Marco Tawachi) and his firm, Intelligent Trades, LLC, with fraudulently marketing commodity futures trading software, under which Tawachi indirectly controlled the trading of his customers’ commodity futures accounts and collected substantial fees for the use of his trading software. In all, the Defendants allegedly defrauded clients of over $479,755.
The CFTC Complaint also charges Tawachi with violating an earlier CFTC Order, issued on April 26, 2012, that charged Tawachi with fraud and misappropriation and permanently prohibited him from commodity futures trading on behalf of others (see CFTC Press Release 6243-12). According to the Complaint, Tawachi continued to trade on behalf of clients, contrary to the Order, and made fraudulent representations to market his commodity futures trading software.
Specifically, the CFTC Complaint, filed on January 7, 2016, charges that starting in at least July 2011, Tawachi began promoting his IT Software through licensing agreements offered by his firm, Intelligent Trades. As alleged, under the Tawachi licensing agreements, clients using the system paid a monthly fee of approximately 10 percent of their account value directly to Intelligent Trades. Also as alleged in the CFTC Complaint, Tawachi made a series of materially false claims to bolster the credibility of his trading system, including making false claims about the profitability of the software trading system and about Tawachi’s purportedly successful trading background. Tawachi maintained that testing had established that the IT software had the ability to provide high trading returns ranging from 15 to 20 percent a month, after fees; however, in fact, according to the Complaint, the actual trading using the IT software failed to produce any profits for clients.
Finally, the Complaint charges Tawachi with acting as a Commodity Trading Advisor, without being registered as such with the CFTC, as required by law.
In its continuing litigation against the Defendants, the CFTC seeks full disgorgement of ill-gotten gains, payment of a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of the 2012 CFTC Order and against further violations of federal commodities laws, as charged.
The CFTC appreciates the cooperation of the U.S. Attorney’s Office for the Central District of California in this matter.
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 Commodity Trading Systems Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Trading Systems Fraud Advisory, which states that the CFTC has witnessed a sharp rise in the fraudulent promotion of commodity trading systems and advisory services.
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: January 7, 2016