The U.S. Commodity Futures Trading Commission (CFTC) has announced that the Honorable Gloria M. Navarro of the U.S. District Court for the District of Nevada (Las Vegas) entered an Order of Summary Judgment against Defendant Mirko (Mick) Schacke of Brentwood, California (formerly Antioch, California), and a Default Judgment against Schacke’s company, TradeMasters USA, LLC of Las Vegas, Nevada.
The Order, entered on June 22, 2018, amends a previous order entered on September 13, 2017, and finds that the Defendants committed fraud in their solicitations of futures trading software customers, failed to register with the CFTC and failed to provide required disclosures to investors. The Court’s Order also requires Schacke and TradeMasters, jointly and severally, to pay disgorgement of $168,626 to defrauded customers and a $505,878 civil monetary penalty.
The Order also imposes permanent trading and registration bans against Schacke and TradeMasters and prohibits them from committing further violations of the Commodity Exchange Act and CFTC Regulations, as charged.
The Order arises from a CFTC enforcement anti-fraud action filed against Schacke and TradeMasters on August 15, 2016.
The Court’s Order finds that Schacke and TradeMasters fraudulently solicited and accepted $168,626 from 39 customers who purchased TradeMasters’ automated futures trading software licenses for as little as $1,500 and as much as $20,000. The Order further finds that Schacke and TradeMasters made false statements regarding the trading performance of TradeMasters and its software to the public via the TradeMasters’ website and other means, such as: a 300% return was earned in just three months by a “real customer,” and TradeMasters software users generate a monthly income of $5,000 to $10,000, when, in fact, the TradeMasters’ software did not work, and users lost money. According to the Order, Schacke and TradeMasters also misrepresented that TradeMasters’ “coaches” have more than two decades of trading experience, when Schacke was the only coach and he had no prior trading experience; trading results presented as actual trading profits, in fact, were only hypothetical; and video testimonials were from “real customer[s],” when they were instead from paid actors.
The Court’s Order also finds that Schacke personally executed trades for three customers despite TradeMasters and Schacke not obtaining the required registrations to do so, and TradeMasters failed to provide the required disclosures concerning client testimonials on the TradeMasters website.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.