The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have separately moved against New Jersey-based Swapnil Rege and his company SwapStar Capital LLC (SwapStar) with some serious charges of investment fraud, among others.
In two separate announcements on Wednesday, the agencies said that they charged the individual and his company for fraudulent solicitation and misappropriation of funds. Rege swindled his friends, neighbours and others to invest in his securities schemes, promising fixed astronomical returns. In some cases, he promised returns as high as 40 to 60 percent.
He even told the lenders and investors that the funds will be highly liquid and could be redeemed immediately or on short notice.
Rege used a portion of the solicited funds to actively trade commodity interests through the accounts of his clients and even his wife’s trading account. Additionally, he misappropriated some of his clients’ money for covering personal expenses.
He even paid the returns of some of the victims with the capital brought in from other clients, making it a classic Ponzi scheme.
A Repeat Offender
However, this is not the first attempt of financial misconduct organized by Rege. He was barred by both the SEC and the CFTC in 2019 for at least three years from being in the investment advisory business and trading any commodity interests.
The securities market watchdog is now seeking a preliminary injunction, asset freeze and other emergency and ancillary relief from Rege, while the CFTC has moved for a permanent trading and registration ban against him.
Both the agencies are seeking disgorgement of all solicited funds, civil monetary penalties with interest and restitution.
Meanwhile, the Israeli police along with its foreign counterparts made dozens of arrests recently in connection with two separate massive rackets of binary and other investment frauds.
