Michael Salerno and His Companies Were Asked to Pay $1.2 million for Conducting Forex Trading Scheme

According to the release posed by the United States Commodity Futures Trading Commission (CFTC) yesterday, Michael Salerno of Chadds Ford, Pennsylvania, and his companies Black Diamond Forex LP, BDF Trading LP, and Advanta FX were convicted of fraud by U.S. District Court for the Eastern District of Pennsylvania for their alleged involvement in encouraging the public to become forex traders. The defendants was fined for more than $1.2 million.

Prior to this, the court entered an order on September 24, 2020, requiring the defendants to pay $335,149 in restitution and a civil monetary penalty of $894,000. Moreover, Black Diamond Investment Group was asked to pay $1,488 in disgorgement. Under the order, the defendants were permanently banned from conducting any violations against the Commodity Exchange Act, from registering with the CFTC, and from trading in any venues that regulated by the CFTC.

CFTC found that during the period of January 2017 and March 2018, Salerno and his companies fraudulently solicited potential victims online, mainly through LinkedIn, Indeed.com and their own websites.

Specifically, they lured traders to make risk deposits, and claimed that the deposit will be stored in the proprietary forex trading accounts. Traders will be able to enjoy a part of trading profits and some performance bonuses. Furthermore, they described Salerno as a successful forex trader who invested more than $9.5 million, earned through real estate sales, in his proprietary trading firms.

In fact, Salerno filed for bankruptcy at the same year he alleged the real estate sales, and was sentenced to 21 months in prison in 2005. It is not surprising that he failed to open any real trading accounts and misappropriated the risk deposits.