Chadds Ford, PA – April 25, 2018 – Michael Salerno, 45, of Chadds Ford, Pennsylvania, has been accused of defrauding individuals through a foreign currency (forex) trading scheme, according to a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC). The complaint, filed on April 17, 2018, in the U.S. District Court for the Eastern District of Pennsylvania, alleges Salerno and his companies – Black Diamond Forex LP, BDF Trading LP, and Advanta FX – fraudulently solicited prospective traders and misappropriated their funds.
The CFTC alleges that beginning in January 2017 and continuing through at least March 2018, Salerno and his companies made false statements on platforms like LinkedIn and Indeed.com to attract individuals to become forex traders. Prospective traders were required to pay a “risk deposit” ranging from $1,200 to $1,900, with the promise that these deposits would be matched by company funds and used for proprietary trading, with profits shared between the trader and the company.
The complaint details that at least 150 prospective traders deposited a total of at least $310,000 in risk deposits. However, the CFTC alleges Salerno misrepresented his financial success and history. He claimed to have amassed significant income in forex trading, possess a $9.5 million overseas bank account, and have recently sold $10 million in real estate. In reality, Salerno allegedly hasn’t successfully traded forex for at least five years, filed for bankruptcy in 2015 with over $250,000 in debt, and was convicted of a felony in 2005, receiving a 21-month prison sentence – information he failed to disclose to prospective traders.
The CFTC also named Black Diamond Investment Group and Advanta Capital Markets Ltd. as Relief Defendants, alleging they held funds obtained from traders that were not used for forex trading. On April 17, 2018, U.S. District Court Judge Cynthia M. Rufe issued a Statutory Restraining Order, freezing the assets of all defendants and prohibiting the destruction of records. A hearing is scheduled for May 1, 2018, to consider the CFTC’s motion for a preliminary injunction.
The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, and a permanent ban on Salerno and his companies from engaging in commodity trading. The investigation is ongoing.
Source: CFTC.gov
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