The Commodity Futures Trading Commission announced that the US District Court for the Southern District of Florida entered a default judgment against Emerson Pires, Flavio Goncalves and Joshua Nicholas for fraud and other violations of the Commodity Exchange Act and CFTC regulations tied to the EmpiresX commodity pool scheme. The order imposes monetary sanctions and permanently bars the defendants from CFTC registration and from trading in CFTC-regulated markets. Pires and Goncalves must pay jointly and severally more than USD 32 million in disgorgement and more than USD 96 million in civil monetary penalties, while Nicholas must pay USD 289,000 in disgorgement and USD 867,000 in civil monetary penalties. The court found the defendants solicited participants from around September 2020 to trade commodity futures and options through EmpiresX pools, that at least USD 41.6 million was pooled from more than 12,500 individuals, and that participants were misled through false claims about fund use, pool size and returns, including a fake website mimicking a well-known electronic trading platform; by November 2021, withdrawal requests were no longer honored. The order also found the individuals acted as associated persons of a commodity pool operator without required registration, and that Pires and Goncalves commingled pool funds. The judgment resolves the CFTC complaint filed on June 30, 2022, and follows an earlier court order requiring Empires Consulting Corp. to pay USD 64 million in monetary sanctions. The release also noted related actions including a Department of Justice announcement that Nicholas pleaded guilty to conspiracy to commit securities fraud and a Securities and Exchange Commission default judgment against Pires and Goncalves.

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