The defendants were accused of providing false investment information to customers. According to the regulator, the defendants knowingly deceived customers into taking wrong trading moves. The Commodity Futures Trading Commission (CFTC) has slammed Silver Star FX and its co-owner David Wayne Mayer with fraud charges for the promotion of passive returns via their forex trading bot.

According to the regulator, the defendants deceived customers and investors to open a discretionary trading account from July 2018 to March 2019.

They promoted their trading system with wrong information

They offered an automated trading system created by Mayer for customers to trade their accounts.

Also, the regulator stated that while SSLS unlawfully allowed Mayer to be associated with them, he has not registered as an associated person of a CTA and SSL. The defendants include David Mayer, Silver Star Live (SSL), and Silver Star FX.

The court order pronounced that the three defendants are legally responsible for solicitation fraud, CFTC registration violations, and Commodity Trading Advisor (CTA) fraud.

The order requires SSL to pay $198,143.03 in restitution while Mayer and SSLS will pay a joint fine of $3.712 million in restitution.

Also, the entities and Mayer are charged an additional $9.8 million as a civil penalty, while Mayer will pay an additional $1.34 million.

The defendants misrepresented their service

The defendants used online videos as a promotional tool to create awareness for such services. However, they made a false representation of the true nature of the investment proposal, which caused its customers to lose their money. The assurances given in their promotions misrepresented Mayer’s trading experience and qualifications. Additionally, they expected trading profits, and the performance history of the forex trading system was exaggerated. This did not provide the customers and investors with the opportunity to see the true nature of things before they invested.

While the defendants were busy promoting the forex trading system, Mayer, the creator of the system, never opened a live trading account using the trading system. Also, the defendants did not disclose that Mayer had never used the trading system for his account.