Regulator hunts for default judgement against GDLogix

A leading regulator in the US has asked a court to provide a default judgement against a firm and an individual accused of fraudulent foreign exchange derivative provision.

The Commodity Futures Trading Commission (CFTC) has asked the US District Court for the Eastern District of New York to lodge the default certificates against a firm named GDLogix Inc. and its owner, Daniel Winston LaMarco.

According to the documentation, the defendants have not participated in or answered the questions outlined in the complaint from the CFTC.

The case, which dates back to 2017, has also apparently seen the defendants continue to be granted time extensions in which to answer.

LaMarco is accused of a range of acts of wrongdoing, such as creating false statements and making false claims about his successes to date.

Now, a court has told the CFTC to file the request for the certificates of default – and it was given until 10^th July of this year to do this.

According to industry reports, neither the firm nor LaMarco had got back to the regulator regarding the complaint at the moment the request for these certificates was submitted.

The civil enforcement action against the pair was first filed several years ago.

When that happened, the regulator divulged more details about the nature of the accusations against the two – alleging that fraud took place “from January 2011 through March 2016”.

During that time, the CFTC said, “LaMarco fraudulently solicited and accepted $1,492,650 from 13 individuals to trade off-exchange leveraged or margined retail derivatives forex contracts in a commodity pool operated by the Defendants.”

It went on to outline the wide range of communication methods that LaMarco allegedly used in order to get his scheme off the ground.

“LaMarco solicited pool participants by word-of-mouth, by email, by the Internet, by the use of mails, and/or other means, according to the Complaint,” it said.

“Further, as alleged, LaMarco solicited pool participants by falsely representing to them the purported success of his personal investments in forex trading and the purported safety of his forex investment strategy. All of these representations were material and false, the Complaint alleges.”

The CFTC also alleged at the time that LaMarco had scammed his own friends as part of the scheme.

“While the majority of the pool participants were friends and acquaintances of LaMarco located in and around Suffolk County, New York, other pool participants lived in Connecticut, Massachusetts, and Ohio, according to the Complaint,” it said.

He supposedly went to significant lengths in order to minimise the chances of his alleged scheme being uncovered.

“To conceal and perpetuate his fraud, beginning on or about February 2011, according to the Complaint, LaMarco emailed participants fabricated monthly statements purported to provide the pool’s profits, losses, and net balances of each participant,” he said.

“However, according to the Complaint, all of the information in the monthly statements was false. LaMarco also allegedly misappropriated pool funds, which he spent on personal expenses or lost in unprofitable trading in his personal accounts,” he added.

About the author: Justin Freeman

Justin is an active trader with more than 20-years’ industry experience of working for big banks and hedge funds. He has an inside knowledge of how the financial markets work, thanks to roles including trader on a $750m Event-Arbitrage desk and CRO and COO of hedge funds running a variety of strategies. From stat-arb and trend-following CTA to fixed-income relative value. Firm’s he has worked at include big banks like Citi, and prominent hedge funds including D. E. Shaw and Millennium Capital Management.

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