CFTC tries to locate Tradewale manager

About three months after the United States Commodity Futures Trading Commission (CFTC) launched an action against Tradewale and its Valdas Dapkus over a fraudulent Forex scheme, the regulator has updated the Court on its efforts to serve the complaint on the defendants.

On December 28, 2021, the CFTC submitted a motion for alternative service on Dapkus at the New Jersey District Court.

The Commission says its efforts to locate and personally serve Dapkus have thus far been unsuccessful, so the Commission now seeks to serve him via the alternative means of email or publication. Specifically, the Commission asks the Court to deem that Dapkus has already been served via email, or in the alternative, for permission to serve Dapkus via publication. Given that the deadline to serve Dapkus is December 28, 2021, the Commission also seeks an additional 90 days, or other reasonable amount of time to complete service of Dapkus, if the Court deems service by publication is necessary.

On September 29, 2021, the Commission filed the instant action which alleges that Defendants Tradewale LLC, Tradewale Managed Fund, and Dapkus, a principal of Tradewale, committed fraudulent solicitation and misappropriation in connection with trading of off-exchange retail Forex, and also charges Tradewale with acting as an unregistered Commodity Trading Advisor. The Commission has made diligent efforts to locate, contact, and serve process on Dapkus.

After filing the Complaint, the Division hired a process server to attempt service of the Summons and Complaint on Dapkus pursuant to FRCP 4(e). The process server made multiple attempts to serve Dapkus at all three residential addresses but was unable to serve Dapkus or learn any additional information regarding his whereabouts. At each of the three addresses, the process server was informed that Dapkus did not reside at that address, and was not provided any forwarding information.

The Commission also tried to contact Dapkus via two different email addresses. Dapkus did not respond to these emails from the Division; however, the emails were not returned as undeliverable.

The Division also attempted to reach Dapkus by telephone. On December 22, 2021, the Division called Dapkus’s phone number and heard a recording stating that the phone number was not in service. Accordingly, at this point in time, the Division has exhausted its reasonably available options to find and serve Dapkus.

The Commission requests that its prior emailing of the Summons and Complaint to the two email addresses associated with Dapkus be considered a valid means of alternative service. In the alternative, the Commission proposes to serve Dapkus via alternative service in three publications by publishing notices both online and in print.The Chicago Sun-Times, Chicago Tribune and the Daily Herald are widely-circulated newspapers that publish legal notices in print and online. All three papers are circulated in DuPage County, where Dapkus was last known to be located.

The Commission requests that all three publications publish notice of the Summons along with a link to the Complaint at the CFTC’s website, published once a week for a four-week period.

According to the complaint, through its website, tradewale.com, as well as various social media platforms, Tradewale fraudulently solicited members of the public to deposit funds into accounts managed by Tradewale for the purported purpose of buying and selling investment products, including forex. Through such solicitations, Tradewale persuaded at least 15 individuals to transfer at least $ 700,000 to Tradewale.

In soliciting members of the public to trade, Tradewale made various material misrepresentations and omissions, including that it had a “unique trading system” using “artificial intelligence” to trade forex, and that it generated average monthly returns of 4% – 11% and average yearly returns of over 55% with “minimal risk.”

Although Tradewale’s solicitation materials claimed that accounts could be “easily accessed,” most, if not all, U.S. customers of Tradewale were never able to withdraw funds from their accounts. Instead, the defendants misappropriated customer funds for unauthorized purposes, including misappropriation of funds in bank accounts Dapkus established and for which he was the sole signatory.

The complaint further alleges that Tradewale is liable for Dapkus’ misappropriation fraud because he committed his violations within the scope of his employment, agency or office with Tradewale LLC.

2021-12-30