A Florida-based company and three of its executives have been charged with orchestrating a fake trading scheme, the Securities and Exchange Commission announced.
The SEC filed its complaint against Empires Consulting Corp., also known as EmpiresX, along with company founders Emerson Sousa Pires and Flavio Mendes Goncalves and head trader Joshua David Nicholas.
The defendants are accused of raising at least $40 million from investors with false claims of one percent daily profits and then misappropriating a large portion of the money they raised for personal use. They are charged with violating the registration and anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Since at least late 2020, EmpiresX was allegedly selling investments promising daily one percent profits earned by a trading “bot” or Nicholas’ manual trading. “The complaint alleges that, in reality, the bot was fake, Nicholas’ trading resulted in significant losses, and the defendants only transferred a small portion of investors’ funds to EmpiresX’s brokerage account,” the complaint stated.
According to the SEC, large sums of investor funds were diverted to lease a Lamborghini, shop at Tiffany, make a payment on a second home, and more.
The defendants also are accused of falsely telling investors that EmpiresX had filed paperwork with the SEC to register as a hedge fund. The commission said that when the scheme collapsed, the defendants wound down EmpireX’s operations, stopped investor withdrawals, and relocated to Brazil.
The SEC is seeking injunctions against future securities law violations, disgorgement of the defendants’ ill-gotten gains, civil penalties, and officer and director bars against Pires and Goncalves. Charges were also announced against EmpiresX, Pires, Goncalves and Nicholas by the U.S. Justice Department and Commodity Futures Trading Commission.
Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. We bring a unique level of knowledge and experience when representing the rights of investors, including resolving cases through arbitration and litigation when necessary. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (888) 655 6002 or through our online contact form for a no-cost evaluation of your matter.