Chadds Ford, Pennsylvania resident Michael Salerno and his companies, Black Diamond Forex LP, BDF Trading LP, and Advanta FX, have been ordered to pay over $1.2 million for perpetrating a forex fraud, according to a default judgment entered by the U.S. District Court for the Eastern District of Pennsylvania on September 24, 2020.
The Commodity Futures Trading Commission (CFTC) brought the enforcement action in April 2018, alleging Salerno and his firms fraudulently solicited public members to become foreign currency traders. The court found the defendants made false promises to prospective traders, claiming they would match risk deposits with company funds and share in trading profits, including performance bonuses.
Specifically, Salerno allegedly advertised these opportunities on platforms like LinkedIn and Indeed.com, as well as company websites. He falsely represented a successful trading history, claiming to have amassed $9.5 million in real estate sales to fund his companies. However, investigators discovered Salerno had filed for bankruptcy around the time of the claimed real estate sales and had previously been convicted of a felony in 2005, receiving a 21-month prison sentence.
The court order mandates Salerno and his companies pay $335,149 in restitution to defrauded investors, a civil penalty of $894,000, and $1,488 in disgorgement. Furthermore, the defendants are permanently prohibited from violating the Commodity Exchange Act, registering with the CFTC, and trading on any CFTC-regulated markets.
The CFTC cautioned that victims may not recover the full amount of their losses, as wrongdoers may lack sufficient assets. The agency stated its commitment to protecting customers and holding accountable those who commit fraud.
The case was led by CFTC staff members Elizabeth M. Streit, Joy McCormack, Scott Williamson, and former staff member Barry Blankfield.
Source: CFTC.gov
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