Swapnil Rege and his company, SwapStar Capital LLC, are facing charges of fraudulent solicitation and misappropriation of funds, the Commodity Futures Trading Commission (CFTC) announced today. The civil enforcement action, filed in the U.S. District Court for the District of New Jersey, also alleges Rege violated a prior CFTC consent order that prohibited him from trading commodity interests for at least three years.
The CFTC is seeking permanent trading and registration bans for both Rege and SwapStar. They are also pursuing civil monetary penalties, restitution, and disgorgement of ill-gotten gains. Additionally, the agency requests a permanent injunction preventing Rege from further violating the 2019 consent order and from any future violations of the Commodity Exchange Act and CFTC regulations.
According to the complaint, Rege and SwapStar fraudulently solicited funds from individuals with promises of high returns – ranging from 40% to 60% – on investments purportedly in securities. Investors were led to believe they could redeem their funds quickly. However, the CFTC alleges a significant portion of these funds were used for active commodity trading through accounts controlled by Rege, including those nominally held by his spouse, Reema Rege, who is named as a relief defendant.
The complaint further details allegations that the defendants misappropriated solicited funds for personal expenses and used new investments to pay existing investors, a classic Ponzi scheme structure. Crucially, Rege allegedly failed to disclose his existing ban from trading commodity interests, stemming from a 2019 consent order with the CFTC.
The Securities and Exchange Commission (SEC) has also filed a related action against Rege and SwapStar Capital, further intensifying the legal pressure. The CFTC acknowledged the assistance of both the SEC and the New Jersey Bureau of Securities in the investigation.
Benjamin J. Rankin, Trevor Kokal, Patryk J. Chudy, Lenel Hickson, Jr., and Manal M. Sultan of the CFTC’s Division of Enforcement are leading the case.
Source: CFTC.gov
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