Florida Forex Trader Fined $3.4M for Futures, Forex, Options Scheme

The Commodity Futures Trading Commission (CFTC) Thursday announced the U.S. District Court for the Southern District of Florida entered a consent order on March 20 imposing a permanent injunction, civil monetary penalty, restitution, and equitable relief against Joseph Carvajales (Carvajales), a resident of Florida.

The order requires Carvajales to pay $2.4 million in restitution to defrauded customers and a $1 million civil monetary penalty. The order also imposes permanent trading and registration bans and a permanent injunction prohibiting the defendant from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

The order finds, among other things, Carvajales, an employee of The W Group (WTG), willfully or recklessly made numerous false statements to WTG customers and prospective customers in connection with futures, retail foreign currency contracts (forex), and options.

Specifically, from June 2013 through June 2020, Carvajales, made false claims to prospective WTG customers about where WTG traded; that WTG would use a commodity trading algorithm to trade futures, forex, and/or options on behalf of customers; that individual trading accounts were opened, that customer funds were deposited into trading accounts, and that trading was conducted; and the profit potential that could be made and the risks of trading. In reality, individual trading accounts were never opened, customer funds were not deposited into trading accounts, and no trading was conducted.