PHOENIX, AZ – Purvesh Mankad and his affiliated companies, CTAX Series, LLC and CTAX Partners, LLC, have been ordered to pay over $2.3 million in restitution and penalties for defrauding investors, the Commodity Futures Trading Commission (CFTC) announced Tuesday.
The U.S. District Court for the District of Arizona entered a consent order on October 19, resolving a CFTC action filed in October 2021. Mankad and his firms were found liable for fraudulent solicitation, misappropriation of funds from investors in the CTAX Series 1, LLC commodity pool, and making false statements to the National Futures Association (NFA).
According to the CFTC, between July 2014 and March 2019, Mankad misrepresented the trading expertise behind the CTAX pool. He claimed experienced commodity trading advisors (CTAs) would manage the funds, but instead, he – despite having limited and unsuccessful trading experience – conducted most, and eventually all, of the trading.
The court found that Mankad and CTAX Partners misappropriated pool funds by charging excessive brokerage commissions triggered by his unauthorized trading. He also recklessly traded the pool’s assets, leading to an 89% loss and over $1.9 million in losses for investors. These losses were concealed from investors through delayed monthly account statements.
Further compounding the fraud, Mankad submitted false emails to the NFA during an audit, falsely claiming timely account statements were provided to all investors.
The court ordered Mankad and his companies to pay $1,631,072.29 in restitution to victims and a $727,588.91 civil monetary penalty. They are also permanently banned from violating the Commodity Exchange Act and from registering or trading in related markets.
This resolution follows a prior settlement with Paul Ohanian and Scottsdale Wealth Planning, Inc., who were found to have omitted material facts from communications with clients investing in the CTAX pool and for failing to register as CTAs. Ohanian and Scottsdale Wealth were ordered to pay $338,000 in restitution and $169,000 in penalties. Combined with the Mankad settlement, the CFTC has secured full restitution for the victims.
The CFTC acknowledged the assistance of the Securities and Exchange Commission and the NFA in the investigation.
Source: CFTC.gov
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