PHOENIX, AZ – October 8, 2021 – Purvesh Mankad, along with his affiliated entities CTAX Series, LLC and CTAX Partners, LLC, have been charged by the Commodity Futures Trading Commission (CFTC) with multiple counts of fraud, the agency announced today. The civil enforcement action, filed in U.S. District Court for the District of Arizona, alleges fraudulent solicitation, misappropriation of funds from investors in the CTAX Series 1, LLC commodity pool (CTAX Pool), and making false statements to the National Futures Association (NFA).
According to the CFTC complaint, from approximately July 25, 2014, to March 22, 2019, Mankad misrepresented the expertise of traders handling funds within the CTAX Pool. While claiming experienced Commodity Trading Advisors (CTAs) would manage the investments, the complaint alleges that Mankad, who lacked significant trading experience, ultimately conducted the majority – and eventually all – of the trading himself.
The charges further detail that Mankad and CTAX Partners misappropriated pool funds through excessive brokerage commissions generated by his unauthorized trading activity. The CFTC alleges that beginning in July 2018, Mankad’s trading led to an 89% loss of the CTAX Pool’s assets, resulting in over $1.9 million in losses for investors. These losses were allegedly concealed through delayed delivery of monthly account statements and falsified emails submitted during an NFA audit.
The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
In a related matter, the CFTC also settled charges against Paul Ohanian, an SEC-registered investment advisor based in Scottsdale, Arizona, and his firm, Scottsdale Wealth Planning, Inc. Ohanian and Scottsdale Wealth were found to have intentionally or recklessly omitted material facts from communications with clients who were also investors in the CTAX Pool, and for failing to register with the CFTC as commodity trading advisors.
Ohanian and Scottsdale Wealth have been ordered to pay $338,000 in restitution and a $169,000 civil monetary penalty. They are also prohibited from trading in commodity interests, registering with the CFTC, or engaging in related activity for a period of four years.
Source: CFTC.gov
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