NEWARK, NJ – Swapnil Rege, 47, of New Jersey, has been permanently banned from trading and registration in commodity markets following a judgment entered by Judge Zahid N. Quraishi of the U.S. District Court for the District of New Jersey on September 2, 2022. The Commodity Futures Trading Commission (CFTC) brought the charges against Rege, his company SwapStar Capital LLC, and relief defendant Reema Rege.
The court found that Rege engaged in fraudulent solicitation and misappropriation of funds from investors. Specifically, Rege misrepresented that investor funds would be invested and guaranteed fixed returns, sometimes as high as 40% to 60%, with immediate or short-notice redemption available. However, the CFTC’s investigation revealed that Rege used a portion of the funds to trade commodity interests through accounts he controlled, including those held in the name of his spouse, Reema Rege. A portion of the funds were also used for personal expenses and to pay returns to earlier investors, functioning as a Ponzi scheme.
Adding to the severity of the violations, Rege had previously been barred from trading commodity interests for at least three years under a prior CFTC consent order. The court found that he knowingly violated this order by continuing to trade during the prohibited period.
The final judgment requires Rege, SwapStar Capital LLC, and Reema Rege to pay a combined $4,894,225 in disgorgement and pre-judgment interest of $161,335. Reema Rege’s disgorgement obligation is limited to the balances in specified accounts. Additionally, a $200,000 civil monetary penalty has been imposed. The case stems from a complaint filed by the CFTC on October 26, 2021.
“This Order reflects the CFTC’s continued commitment to ensuring that wrongdoers are held fully accountable for their misconduct, including for violating a prior consent order,” stated CFTC Acting Director of Enforcement Gretchen Lowe. The CFTC also collaborated with the Securities and Exchange Commission (SEC) on this case, which brought a parallel civil action leading to similar judgments against Rege and SwapStar Capital LLC.
The CFTC reminds investors that recovery of funds may not be possible as wrongdoers may lack sufficient assets.
Source: CFTC.gov
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