CFTC Fines Denari Capital with $8.3 Million FX Fraud

CFTC Fines Denari Capital and its Owners with fraudulently soliciting more than $8.3 million from at least 28 participants.

06 November 2019, AtoZMarketsThe US Commodity Futures Trading Commission (CFTC) has issued several customer protection fraud notices. That provides the warning signs of fraud, including the fraud notice on the Forex market. It alerts customers against fraud and lists simple ways to spot forex frauds.

CFTC Fines Denari Capital

The CFTC announced Tuesday that it had filed a lawsuit against the Travis Capson defendants, Arnab Sarkar, and their California company, Denari Capital, LLC. It is for committing $ 8.3 million in foreign currency fraud. The complaint was filed in the US Northern District Court of California. More specifically, the complaint accuses the defendants of fraudulently seeking more than $ 8.3 million from at least 28 participants. Recently, CFTC also fines Silver Star FX owners.

The US regulator seeks to disgorge civil monetary penalties, restitution, permanent registration, and trading bans. It also seeks a permanent injunction against other violations of the Commodity Exchange Act and the regulation of the CFTC.

Read More: Eleven Forex Brokers lose CySEC Investor Compensation Fund Membership

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Why CFTC fines Denari Capital?

Capson of Utah and Sarkar of California collected this money through a simple investment plan. That included leverage or off-exchange margins on the forex. Also, Capson has been accused of making false statements to the National Futures Association (NFA).

Since at least 2012 until today, according to the CFTC's complaint, the defendants have pooled and mixed their victims' funds into Denari bank accounts. And they used them for various purposes. It includes foreign exchange, real estate, securities transactions, and personal expenses.

Capson and Sarkar fraudulently solicited participants and potential participants. They did that by voluntarily or recklessly making material misrepresentations. That was regarding the past profitability of Denari's foreign exchange operations and the profits that its participants were making. The US regulator said that in a statement. The defendants also allegedly issued false statements to participants. Those were falsely represented the profitability of their respective interests in the pool. In October, CFTC files lawsuit against Nevada-based circle society

Because of the nature of the business, the defendants had to register with the CFTC. However, according to the complaint, Denari and Capson did not register until 01 May 2019. On the other hand, Sarkar never registered. During an NFA review on 15 July 2019, Capson misrepresented to the regulator, alleging the complaint. In particular, Capson stated that Denari traded only equity and hid its operations from its clients' funds.

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