WASHINGTON D.C. – Jozef Gherman, of Florida, and his company J Squared LLC have been charged by the Commodity Futures Trading Commission (CFTC) with defrauding over 40 investors out of more than $300,000 through the sale of digital assets. The CFTC issued an order filing and settling charges against Gherman, the principal owner and CEO of J Squared, and the company itself.
According to the CFTC, from June 2017 through June 2018, Gherman and J Squared solicited funds—in both digital currency and traditional cash—from investors to trade virtual currencies like Bitcoin, Bitcoin Cash, and Ether. The agency alleges they made false and misleading statements, or omitted crucial information, to induce individuals to invest, add to existing investments, or hold onto their funds.
Specifically, the complaint details misleading claims regarding J Squared’s growth, client base, and selectivity in accepting customers. Gherman and J Squared are accused of recklessly misrepresenting the potential for profit while downplaying the risks associated with the investments. Customers ultimately suffered losses exceeding $247,000.
The settlement requires Gherman and J Squared to jointly pay a $150,000 civil monetary penalty, capped at $75,000 per entity. They are also ordered to pay $247,110 in restitution to the defrauded investors, with each entity’s share capped at $123,555. Post-judgment interest will accrue on both penalties and restitution.
In addition to the financial penalties, Gherman and J Squared are banned for 10 years from trading on any CFTC-registered platform or engaging in activities requiring CFTC registration. The CFTC cautioned investors that restitution orders do not guarantee full recovery of lost funds.
“The CFTC will continue to work to protect participants from false and misleading solicitation practices and hold those engaging in such practices, including individuals, accountable,” said Acting Director of Enforcement Vincent McGonagle. The case was led by CFTC staff members Patrick Daly, Trevor Kokal, Christopher Giglio, Yusuf Capar, Patryk J. Chudy, Lenel Hickson, Jr., and Manal M. Sultan.
Source: CFTC.gov
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