CFTC seeks $5M in disgorgement from SwapStar Capital
The Commodity Futures Trading Commission (CFTC) may soon reach a successful closure of its action against Swapnil Rege and his fraudulent enterprise SwapStar Capital LLC. The regulator has filed a proposed final judgment in the New Jersey District Court.
The CFTC requests that the Court approve and enter the proposed final judgment and consent order, which reflects the terms of a settlement between the Commission and Defendants Swapnil Rege and SwapStar Capital LLC, and Relief Defendant Reema Rege.
The CFTC filed this action on October 26, 2021. The Commission alleges that Defendants fraudulently solicited individuals to lend or invest money based on material misrepresentations, used a portion of the solicited funds to actively trade commodity interests, misappropriated some of the solicited funds for their personal benefit, and transferred some of the solicited funds among individuals in a manner akin to a Ponzi scheme.
Further, the CFTC complaint alleges that the defendants transferred certain funds to Relief Defendant Reema Rege, and that Relief Defendant Reema Rege is not legally entitled to and has no legitimate claim to those funds. In addition, the Commission alleges that by continuing to trade commodity interests on or subject to the rules of any registered entity, Defendant Rege violated a July 18, 2019 Commission order that was entered in settlement of prior fraud charges.
Defendants and Relief Defendant are also parties to a parallel civil action brought by the SEC, which charges Defendants for conduct similar to that which is at issue in this matter, and also names Reema Rege as a Relief Defendant. The CFTC understands that the SEC, Defendants, and Relief Defendant have contemporaneously submitted proposed consent judgments that would resolve all of the claims in the SEC Action as well.
The CFTC asks the Court to approve the propose final judgment and consent order because it is fair, reasonable, and in the public interest.
The final judgment and consent order would permanently enjoin Defendants from future violations of the anti-fraud provisions of the Commodity Exchange Act and the Commission’s Regulations charged against them in the Commission’s Complaint, and impose permanent trading and registration bans. Further, Defendants and Relief Defendant will be jointly and severally liable for disgorgement, which will be paid back to Account Holders, in the amount of $4,894,225 and prejudgment interest in the amount of $161,335, representing the gains received in connection with such violations.
Finally, Defendants will, jointly and severally, be liable for a civil monetary penalty in the amount of $200,000.