A U.S. District Court in New Jersey has issued a default judgment against Illinois resident Valdas Dapkus and his companies, Tradewale LLC and Tradewale Managed Fund, finding them liable for a fraudulent foreign currency investment scheme. The Commodity Futures Trading Commission (CFTC) brought the case in September 2021, alleging Dapkus and his entities fraudulently solicited investments from the public and misappropriated the funds.
The court’s orders, finalized on November 28, require Dapkus and the Tradewale entities to jointly pay $713,520 in restitution to approximately 17 customers who invested in the scheme. They are also assessed a penalty of $2,140,560. The court found that none of the investors received a return of their principal investment.
According to the CFTC complaint, Tradewale falsely advertised a “unique trading system” utilizing “artificial intelligence” to trade foreign exchange (forex). The company claimed average monthly returns of 4%-11% and annual returns exceeding 55% with “minimal risk.” However, the court found that despite claims of easy access, most customers were unable to withdraw funds, which were instead misappropriated by Dapkus for personal use through bank accounts he solely controlled.
The court also determined that Tradewale operated as unregistered commodity trading advisors (CTAs), soliciting funds via interstate commerce without proper registration with the CFTC. Permanent injunctions were issued, barring Dapkus and Tradewale from trading on CFTC-regulated markets and engaging in further violations of the Commodity Exchange Act (CEA).
The CFTC cautions investors that recovery of lost funds is not guaranteed, as wrongdoers may lack sufficient assets. The agency says it will continue to pursue accountability in such cases. The case was led by CFTC staff members Katie Rasor, Lara Turcik, Christopher Giglio, David MacGregor, Lenel Hickson, and Manal Sultan.
Source: CFTC.gov
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