Less than a month after the Commodity Futures Trading Commission (CFTC) sought entries of default against fraudulent Forex scheme Tradewale LLC and Tradewale Management Fund, the Court has granted the request. This becomes clear from the latest filings with New Jersey District Court.

Clerk’s entries of default as to Tradewale Managed Fund and Tradewale LLC are dated April 11, 2022. The defendants are in default for failure to plead or otherwise defend themselves in this action.

On September 29, 2021, the Commission filed the instant action which alleges that Defendants Tradewale LLC, Tradewale Managed Fund, and Valdas Dapkus, a principal of Tradewale, committed fraudulent solicitation and misappropriation in connection with trading of off-exchange retail Forex, and also charges Tradewale with acting as an unregistered Commodity Trading Advisor. The Commission has been having difficulties to locate, contact, and serve process on Dapkus.

According to the complaint, through its website, tradewale.com, as well as various social media platforms, Tradewale fraudulently solicited members of the public to deposit funds into accounts managed by Tradewale for the purported purpose of buying and selling investment products, including forex. Through such solicitations, Tradewale persuaded at least 15 individuals to transfer at least $ 700,000 to Tradewale.

In soliciting members of the public to trade, Tradewale made various material misrepresentations and omissions, including that it had a “unique trading system” using “artificial intelligence” to trade forex, and that it generated average monthly returns of 4% – 11% and average yearly returns of over 55% with “minimal risk.”

Although Tradewale’s solicitation materials claimed that accounts could be “easily accessed,” most, if not all, U.S. customers of Tradewale were never able to withdraw funds from their accounts. Instead, the defendants misappropriated customer funds for unauthorized purposes, including misappropriation of funds in bank accounts Dapkus established and for which he was the sole signatory.

The complaint further alleges that Tradewale is liable for Dapkus’ misappropriation fraud because he committed his violations within the scope of his employment, agency or office with Tradewale LLC.