LAS VEGAS (CN) — A Californian operating his company TradeMasters out of Nevada defrauded people of $155,626 in bogus commodities trading software, the Commodity Futures Trading Commission says, and it wants the money back.
The CFTC sued Mirko “Mick” Schacke, of Antioch, Calif., and his wholly owned company TradeMasters USA, which employs two salesmen in Henderson, Nev., a fast-growing suburb of Las Vegas. Neither Schacke nor his company have ever registered with the CFTC in any capacity, it says in its Monday complaint in Federal Court.
Since June 2013, Schacke has sold TradeMasters “automated futures trading software” to at least 36 people, for a total of $155,626. He charged $1,500 to $20,000 for a software license, plus recurring monthly fees of $250 to $1,000 for “‘system setup,’ ‘training activities and updates’ and ongoing personal trading support,” according to the complaint.
Among his misrepresentations were that “a customer gained more than 500 percent in 2014; a customer gained more than 40 percent ‘in only 10 weeks’; ‘most users manage to generate a monthly income of 5 to $10,000’; some customers ‘quickly reached [income of] 15 to $30,000 each and every month,'” and so on, the CFTC says.
But it was a fraud, the commission says: “The fraudulent representations included, among others: misrepresenting that certain trading results were actual when they were hypothetical, using cherry-picked results that were not representative of customers’ actual trading experience, and making false claims of large customer profits resulting from the use of TradeMasters software.”
Schacke used his own software “to varying degrees” in trading for himself, the CFTC says. Apparently, it worked in one year out of four. His personal accounts showed “a negative 22.95 percent rate of return for 2013, a negative 31.73 percent rate of return for 2014, a positive 281.74 percent rate of return for 2015 and a negative 34.78 percent rate of return through March 2016,” according to the complaint.
It continues: “Overall, the accounts earned a net profit of $9,025.52 on a net investment of approximately $43,000 from July 2013 through June 2106.”
That’s a return of 21 percent, though because Schacke used TradeMasters software “to varying degrees,” it’s impossible to tell, from the CFTC complaint, how much of his gains or losses were attributable to the software.
The commission seeks disgorgement, restitution and fines; it wants Schacke and his company permanently barred from trading, and damages for fraud, deception, failure to provide required disclosures, failure to register as a securities adviser, and violations of the Commodity Exchange Act.
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