Ghassan Tawachi of Irvine, California, has been permanently barred from commodity trading and ordered to pay $1.479 million in penalties and disgorgement for defrauding clients with a faulty software trading system, the Commodity Futures Trading Commission (CFTC) announced August 1, 2016.
Tawachi, along with his firm Intelligent Trades, LLC, was found to have jointly and severally defrauded clients out of $479,755. The CFTC obtained a federal court Consent Order on July 29, 2016, from Judge Andrew J. Guilford of the U.S. District Court for the Central District of California (Santa Ana), imposing a $1 million civil monetary penalty in addition to the full disgorgement of ill-gotten gains.
The investigation, originating from a complaint filed on January 7, 2016, revealed that Tawachi acted as an unregistered Commodity Trading Advisor. From July 2011 to at least July 30, 2012, Tawachi allegedly induced clients to pay a 10% monthly fee to utilize his software system, falsely claiming it could generate profits of up to 20% per month. Clients paid a total of $479,000 in fees, but the software consistently failed to produce any profits.
This isn’t Tawachi’s first run-in with the CFTC. The current order also enforces a 2012 CFTC order that previously prohibited him from commodity futures trading after prior findings of fraud and misappropriation. The new order imposes a permanent injunction against further violations of that prior order.
The CFTC warns that victims of fraud may not recover their losses as wrongdoers may lack sufficient assets. The agency continues to pursue legal action against those who violate commodity trading laws and encourages the public to report suspicious activity via its toll-free hotline or online complaint form.
The case was led by CFTC Division of Enforcement staff members Michael Amakor, Thomas J. Kelly, James H. Holl, III, Peter M. Haas, and Paul G. Hayeck. The CFTC also acknowledged the cooperation of the U.S. Attorney’s Office for the Central District of California.
Source: CFTC.gov
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