CFTC Charges Swapnil Rege and His Company with Fraudulent Solicitation, Misappropriation, and Violating Consent Order

The US Commodity Futures Trading Commission (CFTC) announced yesterday that it has charged a New Jersey resident Swapnil Rege and his company SwapStar Capital LLC (SwapStar) with fraudulent solicitation and misappropriation, and Rege with violating a prior CFTC consent order that, among other things, barred him from trading commodity interests for at least three years.

Specifically, the Commission found that the defendants solicited individuals to lend or invest money based on material misrepresentations, including that such funds would be invested in securities, that lenders and investors would receive a fixed monthly, quarterly, or annual return, in some cases as high as 40% to 60%, and that lenders and investors could redeem their funds immediately or on short notice. Moreover, the compliant alleges that the defendants then used a portion of the solicited funds to actively trade commodity interests through accounts the defendants owned, or accounts that were nominally owned by Rege’s spouse but controlled by Rege. Also, the complaint alleges that the defendants misappropriated some of the solicited funds for their personal benefit, including to pay for personal expenses and to pay returns to other account holders in a manner akin to a Ponzi scheme.

In July 2019, Rege has been fined $700,000 in monetary sanctions for fraudulently mismarking swap valuations.