The United States Commodity Futures Trading Commission (CFTC) today announced the filing of an enforcement action in the U.S. District Court for the Northern District of Texas, charging defendants Rudy Avila and six U.S. and Costa Rican companies with fraudulent solicitation to trade in commodity futures, options on commodity futures, and retail off-exchange Forex, misappropriation of funds, and issuing false statements.
The six companies charged are The L.I.F.T. Group LLC (LIFT), CIG Internacional Sociedad Anónima ( CIG) and Trading Technologies Group Sociedad Anónima (TTG) organized in Costa Rica, Trading Ventures Group, LLC (TVG), Capital Ventures Group, LLC (CVG), and Ventures Group, LLC (VGL.). The complaint also charges CIG and TVG with failure to register as Commodity Trading Advisors (CTA).
In the litigation against the defendants, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
As alleged in the complaint, since at least 2017 and continuing through at least spring of 2020, Avila, LIFT, CIG and TTG, acting through their officers, employees, or agents, engaged in a scheme and artifice to defraud by fraudulently soliciting and obtaining at least $4.2 million from at least 170 CIG clients for the purported purpose of trading derivatives and forex.
The complaint further alleges that in a second scheme, since at least 2019 and continuing to the present, Avila, TVG, CVG and VGL, acting through their officers, employees or agents, engaged in another scheme and artifice to defraud by fraudulently soliciting and obtaining at least $1.8 million from at least 55 TVG clients also for the purported purpose of trading derivatives and Forex.
According to the complaint, instead of trading client funds as promised, the defendants obtained and misappropriated funds from CIG and TVG clients by making false material representations and promises and by concealing material information from CIG and TVG clients.
As alleged, the defendants never traded derivatives and forex on behalf of their clients and, instead, stole most of their clients’ investments. In total, CIG clients lost a total of $3.58 million and TVG clients lost a total of at least $1.773 million.