Robert Sorchini and Richard Carter are facing charges of futures fraud following a joint action by the Commodity Futures Trading Commission (CFTC) and the California Department of Corporations. A federal court in Los Angeles issued a restraining order on March 21, 2011, freezing the assets of Sorchini, Carter, and their companies, Trade Tech Institute, Inc. and Technology Trading International, Inc.
The complaint, filed under seal on March 15, 2011, in the U.S. District Court for the Central District of California, alleges that the defendants fraudulently promoted and sold commodity trading systems to the public. These systems, including Trade Tech Analytics, Paradigm, Optimum, Expeditor, MAC, Hybrid, Daytona and Pioneer, were marketed for use in managed accounts trading futures contracts and options.
The CFTC alleges that since at least 2007, Trade Tech, through Carter, Sorchini, and others, actively marketed these systems, making false representations about their profitability and track records. They allegedly failed to adequately warn clients about the risks of futures trading, concealed losing performance records, and made fraudulent performance-based guarantees. The complaint also states that Trade Tech published misleading testimonials and failed to obtain client consent when switching managed accounts between systems.
The defendants have reportedly received over $4.5 million in fees from clients and continue to receive additional fees. They also directed the opening of more than 600 managed accounts and continue to solicit new accounts.
U.S. District Court Judge Audrey B. Collins has scheduled a preliminary injunction hearing for March 28, 2011. The CFTC and the California Department of Corporations are seeking restitution for defrauded customers, civil monetary penalties, and permanent injunctions against further violations of both federal and California laws. The CFTC has established a call-in number, (816) 960-7762, for clients of Trade Tech and Tech Trading to leave messages for the Division of Enforcement.
Source: CFTC.gov
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