LAS VEGAS, NV – Mirko (Mick) Schacke of Brentwood, California, and his company, TradeMasters USA, LLC of Las Vegas, Nevada, have been ordered to pay over $674,000 in penalties and restitution following a CFTC enforcement action, according to a court order entered June 22, 2018, by the Honorable Gloria M. Navarro of the U.S. District Court for the District of Nevada.
The court found Schacke and TradeMasters guilty of fraud related to the solicitation of customers for automated futures trading software. Specifically, they failed to register with the CFTC and did not provide required disclosures to investors. The order amends a previous ruling from September 13, 2017.
The defendants were ordered to jointly and severally disgorge $168,626 to defrauded customers and pay a $505,878 civil monetary penalty, totaling $674,494. They are also permanently banned from trading and registering with the CFTC, and prohibited from future violations of the Commodity Exchange Act and CFTC Regulations.
The CFTC initially filed the anti-fraud action against Schacke and TradeMasters on August 15, 2016. The court found that the defendants fraudulently accepted $168,626 from 39 customers, charging between $1,500 and $20,000 for licenses to the automated trading software.
Evidence presented showed Schacke and TradeMasters made false claims regarding the software’s performance, including assertions of a 300% return in three months and monthly incomes of $5,000 to $10,000 for users. The court determined the software did not function as advertised, and customers lost money. Further misrepresentations included false claims about the experience of “coaches” – Schacke was the sole coach and lacked prior trading experience – and the use of paid actors in video testimonials presented as genuine customer reviews.
Schacke also personally executed trades for three customers without the required registration, and TradeMasters failed to disclose that client testimonials on their website were not authentic. The CFTC cautions that victims may not fully recover their losses due to potential limitations in the defendants’ assets.
Joseph Patrick, Susan B. Padove, Susan Gradman, Scott R. Williamson, and Rosemary Hollinger of the CFTC’s Division of Enforcement were responsible for the case.
Source: CFTC.gov
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