CHADDS FORD, PA – October 9, 2020 – Michael Salerno of Chadds Ford, Pennsylvania, has been ordered to pay over $1.2 million following a default judgment entered by the U.S. District Court for the Eastern District of Pennsylvania. The Commodity Futures Trading Commission (CFTC) brought the case against Salerno and his companies, Black Diamond Forex LP, BDF Trading LP, and Advanta FX, alleging a fraudulent scheme to solicit funds from prospective foreign currency (forex) traders.
The September 24, 2020 court order mandates Salerno pay $335,149 in restitution to victims and a civil penalty of $894,000. Black Diamond Investment Group is also required to disgorge $1,488. The order permanently prohibits Salerno and his companies from violating the Commodity Exchange Act, registering with the CFTC, and trading on CFTC-regulated markets.
The CFTC initially filed its enforcement action on April 17, 2018, accusing Salerno of making false representations and misappropriating funds. According to the complaint, beginning in January 2017 and continuing through March 2018, Salerno and his companies used websites like LinkedIn, Indeed.com, and their own sites to attract individuals interested in forex trading.
Salerno allegedly convinced prospective traders to deposit “risk deposits” with the false promise that the company would match those deposits with company funds in proprietary trading accounts. He further misrepresented that traders would receive a share of profits and performance bonuses. The CFTC alleges Salerno falsely claimed a successful forex trading history and boasted of $9.5 million in real estate sales used to fund his trading companies.
However, investigators found Salerno had no successful forex trading record, filed for bankruptcy the same year he claimed the real estate sales, and had previously been convicted of a felony in 2005, resulting in a 21-month prison sentence. The CFTC claims no live trading accounts were ever established for any investors, and the deposited funds were instead misappropriated.
The CFTC cautions potential victims that restitution orders do not guarantee full recovery of lost funds, as wrongdoers may lack sufficient assets. The agency stated it will continue its efforts to protect customers and hold those who commit fraud accountable.
Source: CFTC.gov
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