Fake trading scheme charged by SEC

The Securities and Exchange Commission has announced fraud charges against Empires Consulting Corp. (EmpiresX), its founders Emerson Sousa Pires and Flavio Mendes Goncalves, and its head trader Joshua David Nicholas, for a scheme that allegedly raised at least $40 million by luring investors with false claims of one percent daily profits, but instead misappropriated large sums of investors' money for personal uses.

According to the SEC's complaint, since at least late 2020, EmpiresX, based in South Florida, sold investments touting daily profits of one percent 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. Instead, the defendants allegedly misappropriated large sums of investors' money to lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home, and more.

The complaint seeks injunctions against future securities law violations, disgorgement of the defendants' ill-gotten gains, civil penalties, and officer and director bars against Pires and Goncalves.

In parallel actions, the U.S. Department of Justice and Commodity Futures Trading Commission (CFTC) announced charges against Pires, Goncalves, and Nicholas, and the CFTC also charged Empires Consulting Corp.