CFTC Takes Action Against Louisiana Firms in Forex Fraud Scheme

Washington, DC - The CFTC has filed a civil enforcement action against two Louisiana-based firms, NOLA FX Capital Management, LLC and Meteor, LLC, as well as their creator, Michael B. DePetrillo. The action, filed in the Eastern District of Louisiana, claims that the defendants engaged in a fraudulent commodities pool scheme that resulted in the theft of more than $7.6 million from at least forty participants.

The complaint describes how the defendants solicited contributions from participants under the guise of pooling assets to trade foreign currency pairs leveraged via the NOLA FX Fund, LLC.

From July 2017 until the present, the entities allegedly supplied investors with fake account statements representing profits and trading activity that never happened. Instead of carrying out the promised transactions, DePetrillo and his firms are accused of utilizing the cash for personal purposes and to pay returns to previous investors, in a manner similar to a Ponzi scheme.

NOLA FX Capital and Meteor, according to the CFTC, operated unregistered commodities pools, while DePetrillo was an unlicensed pool operator related person. The CFTC is seeking reimbursement for the victims, civil monetary penalties, trading and registration prohibitions, and a permanent injunction against any future breaches of the Commodity Exchange Act and CFTC rules.

In a related development, the Eastern District of Louisiana US Attorney's Office has filed an additional criminal charge against DePetrillo.

Final Thoughts

This action demonstrates the CFTC's continuous efforts to prevent fraudulent schemes that prey on unwary investors. As financial markets develop, it is critical for investors to do rigorous due diligence and avoid offers that seem too good to be true. Participation in such scams may have disastrous implications for individuals engaged, both financially and legally.