CFTC and SEC charge SwapStar with investment fraud

The Commodity Futures Trading Commission has filed a civil enforcement action against SwapStar Capital LLC and its owner, Swapnil Rege, with charges for fraudulent solicitation and misappropriation. Rege also violated a prior CFTC order which banned him from trading commodity interests for three years.

A day prior, the Securities and Exchange Commission also charged Rage and his company with stealing money from investment advisory clients, and violating his ban from being in the investment advisory business.

According to the SEC and the CFTC, Rage and SwapStar solicited Rege’s friends, neighbors and other individuals to lend or invest money in his business. He falsely led them to believe that the funds would be invested in securities, that investors would receive returns as high as 40% to 60%, and that lenders and investors could redeem their funds immediately or on short notice.

The regulators noted that Rege and SwapStar used part of the money to trade commodity interests through accounts they owned. Some of the client funds were used to pay bogus gains to some clients, to return original investments amounts to others and to pay for some of Rage’s personal expenses.

Additionally, Rage failed to disclose that he was barred for three years from trading commodity interests under the 2019 consent order.

Both, the CFTC and SEC are seeking permanent trading and registration bans against the defendants, monetary penalties, restitution, and disgorgement. Additionally, the two regulators are seeking a permanent injunction prohibiting Rege from violating the 2019 consent order, and further prohibiting the defendants from committing further violations. The CFTC and SEC name Rage’s wife Reema as a relief defendant.


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