The Commodity Futures Trading Commission (CFTC) has brought charges against Edwin M. Carrion, Jason F. Rodriguez, and Technical Trading Team LLC (TTT).

According to the CFTC complaint, filed with the New York Eastern District Court, from at least January 2020 through the present (the “Relevant Period”), Edwin M. Carrion, individually and as agent of TTT, and Jason F. Rodriguez, individually and as agent of TTT, and TTT, operated a fraudulent scheme in which Defendants solicited, accepted, and misappropriated funds for a pooled investment in, among other things, leveraged or margined Forex contracts.

Carrion, as Chief Executive Officer and agent of TTT, and Rodriguez as Chief Operating Officer and agent of TTT, knowingly or recklessly made fraudulent and material misrepresentations and omissions, in both conversations and written communications, about TTT’s retail forex trading strategy, their experience and track record as investment managers, and the security and risk management of investing in the TTT Pool.

Defendants collectively persuaded approximately twenty-seven individuals to invest at least $5 million in the TTT Pool. Investments were made in the form of loans by participants in the TTT Pool to TTT, memorialized in promissory notes, for which TTT promised to make monthly interest payments ranging from 1.5 to 2%, or 18 to 24% annual interest.

To entice prospective pool participants, Defendants Carrion and Rodriguez—and TTT through Carrion and Rodriguez—knowingly or recklessly made materially false or misleading statements and omissions, that, among other things:

• Defendants offered the ability to participate in a high-yield loan program backed by a retail forex trading fund that could support interest payments of 18 to 24% annualized interest;
• Defendants would maintain a reserve fund to keep the principal of the pool participants’ loans to the TTT Pool from being put at excessive risk;
• Defendants’ investment strategy was to risk 1% of the TTT Pool with the goal of returning 3% profit;
• Defendants would not hold positions overnight, thus keeping the TTT Pool liquid; participants’ loans were secured by TTT’s assets, including real estate, that would not be invested and thus could serve as collateral; and
• Defendants had an extensive and successful track record investing in retail forex and digital assets.
• The statements and omissions were materially false or misleading, and induced pool participants and potential participants to invest their money with TTT.

Defendants knew or were reckless in not knowing that their retail forex trading could not sustain their promises to pool participants to pay fixed rates of return of 18 to 24%. Indeed, Defendants were unsuccessful in their efforts to trade retail forex.

From April 2020 through October 2022, Defendants lost over $3.13 million of pool participants’ money trading retail forex on a leveraged basis. Moreover, Defendants misappropriated participant funds for personal use and, as a result of their unprofitable trading, used new participants’ funds to make interest payments to existing participants.

On or about October 11, 2022, Defendants notified certain pool participants that TTT had defaulted on participants’ loans and that TTT would no longer be making interest or principal payments due under the participants’ promissory notes.

The CFTC accuses the defendants of violation of Sections 6(c)(1), 4b(a)(2)(A)–(C), and 4o(1)(A)–(B) of the Commodity Exchange Act (“Act”), 7 U.S.C. §§ 9(1), 6b(a)(2)(A)–(C), 6o(1)(A)–(B), and Commission Regulations (“Regulation”) 180.1(a)(1)–(3) and 5.2(b)(1)–(3), 17 C.F.R. § 180.1(a)(1)–(3) 17 C.F.R. § 5.2(b)(1)–(3) (2022), which prohibit fraud, and fraud in connection with retail forex transactions and by a commodity pool operator (“CPO”).

In addition to the above-described fraudulent conduct, Defendant Technical Trading Team acted at all times during the Relevant Period as a CPO by operating or soliciting funds for a retail forex pool that did not qualify as an eligible contract participant (ECP) and was marketed to pool participants who were also not ECPs, and engaged in retail forex transactions, without being registered with the Commission as a CPO, in violation of Sections 2(c)(2)(C)(iii)(I)(cc) and 4m(1) of the Act, 7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc), 6m(1), and Regulation 5.3(a)(2)(i), 17 C.F.R. § 5.3(a)(2)(i) (2022).

Further, Defendants Carrion and Rodriguez solicited funds from pool participants for the purpose of trading in leveraged or margined retail forex contracts in accounts pooled with other participants, while associated with Defendant Technical Trading Team as an officer, employee, or agent, without being registered with the Commission as an associated person (“AP”) of Technical Trading Team, in violation of Sections 2(c)(2)(C)(iii)(I)(cc) and 4k(2) of the Act, 7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc), 6k(2), and Regulations 3.12(a) and 5.3(a)(2)(ii), 17 C.F.R. §§ 3.12(a), 5.3(a)(2)(ii) (2022).

The Commission seeks civil monetary penalties and remedial ancillary relief, including, but not limited to, trading and registration bans, restitution, disgorgement, rescission, pre- and post- judgment interest.