Commodity Futures Trading Commission v. Empires Consulting Corp., 1:22-cv-21997

The Commodity Futures Trading Commission (CFTC) sued Emerson Pires, Flavio Goncalves, Joshua Nicholas, and Empires Consulting Corp. for violations of the Commodity Exchange Act stemming from a fraudulent investment scheme called EmpiresX.
The defendants promoted and operated EmpiresX, a commodity pool promising profits through an automated trading bot (the "EX Bot") and falsely claimed funds were securely and profitably managed.
Defendants solicited over $40 million from pool participants through various online platforms, misrepresented the registration and performance of EmpiresX, and improperly used participant funds for personal expenses.
Empires Consulting was not registered as a commodity pool operator, nor were the individual defendants properly registered with the CFTC; they also commingled pool and personal funds in violation of regulations.
The defendants failed to appear or respond after being properly served; default judgment was entered against them.
The CFTC sought and the court granted, among other remedies, a permanent injunction, substantial monetary penalties, large-scale disgorgement, and a trading ban for all individual defendants.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Fraud in commodity pool operation	Defendants made knowing/reckless misstatements about EmpiresX's operations and returns.	No defense presented.	Defendants liable for fraud and deceit under the Act.
Failure to register as associated persons	Defendants acted as associated persons of a commodity pool operator without CFTC registration.	No defense presented.	Defendants violated the registration provisions of the Act.
Commingling of participant and personal funds	Defendants commingled pool and other funds, violating CFTC regulations.	No defense presented.	Defendants liable for commingling in violation of regulations.
Appropriateness of injunctive and monetary relief	Ongoing risk and bad faith warrant permanent injunction and monetary penalties.	No defense presented.	Permanent injunction, disgorgement, and penalties granted.

None cited with official reporter citations; order primarily relies on statutory and regulatory authority under the Commodity Exchange Act.