Commodity Futures Trading Commission v. Oasis International Group, Limited

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

COMMODITY FUTURES

TRADING COMMISSION,

Plaintiff,

v. Case No. 8:19-cv-886-VMC-SPF

OASIS INTERNATIONAL GROUP,

LTD., et al.,

Defendants.

______________________________/

ORDER

This matter is before the Court on consideration of

Plaintiff Commodity Futures Trading Commission’s Motion for

Summary Judgment Against Defendant Michael J. DaCorta (Doc.

# 749), filed on July 17, 2023, and Michael J. DaCorta’s

Motion for Summary Judgment on Behalf of Defendant Michael

J. DaCorta (Doc. # 750), also filed on July 17, 2023. Both

parties responded on August 7, 2023. (Doc. ## 756, 757).

Both parties also replied on August 21, 2023. (Doc. ## 761,

762). For the reasons that follow, the Commodity Futures

Trading Commission’s Motion is granted, and Michael J.

DaCorta’s Motion is denied.

I. Background

A. Procedural History

Plaintiff Commodity Futures Trading Commission

(“CFTC”) filed a complaint against Defendants Oasis

International Group, Limited (“OIG”), Oasis Management, LLC

(“OM”), Satellite Holdings Company (“SHC”), Michael J.

DaCorta, Joseph S. Anile, II, Raymond P. Montie, III,

Francisco L. Duran, and John J. Haas on April 15, 2019.

(Doc. # 1). This complaint alleged violations of the

Commodity Exchange Act (“Act”) and the regulations

promulgated under it. (Id.). Specifically, the complaint

alleged that Defendants had “engaged in a fraudulent scheme

to solicit and misappropriate money from over 700 U.S.

residents for pooled investments in retail foreign currency

contracts.” (Id. at 1). The Court subsequently entered a

restraining order against Defendants. (Doc. # 7). It also

entered Consent Judgments for preliminary injunctions and

other equitable relief against Defendants later that year.

(Doc. ## 43, 174-76). The CFTC also filed an amended

complaint on June 12, 2019. (Doc. # 110).

Now, the CFTC seeks final summary judgment in its

favor against DaCorta. (Doc. # 749). DaCorta also seeks

final summary judgment in his favor. (Doc. # 750). Both the

CFTC and DaCorta responded (Doc. ## 756, 757), and replied.

(Doc. ## 761, 762). The Motions are ripe for review.

B. The Oasis Entities1

The claims against DaCorta stem from his conduct

regarding two entities: (1) OIG and (2) OM (together, the

“Oasis entities”). OIG “solicited, received, and accepted

funds” for foreign exchange (“forex”) trading. (Doc. # 749

at ¶ 9; Doc. # 749-3 at 50:5-10). Similarly, OM “solicited,

received, and accepted funds for investment.” (Doc. # 749

at ¶ 11; Doc. # 749-2 at 94:1-8). Both OIG and OM

aggregated funds from participants into pools for

investment purposes. (Doc. # 4-1 at ¶¶ 45, 48, 57, 60).

Neither OIG nor OM was operated like a typical

company. Neither entity retained standard written policies

nor prepared income statements that disclosed their losses.

(Doc. # 749 at ¶¶ 13, 15; Doc. # 757 at ¶¶ 13, 15).

1 While DaCorta disputes several of the underlying facts of

this case, he does not provide sufficient evidence to

create a genuine dispute of material fact. See Jeffery v.

Sarasota White Sox, Inc., 64 F.3d 590, 593–94 (11th Cir.

1995) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324

(1986)) (“When a moving party has discharged its burden,

the non-moving party must then ‘go beyond the pleadings,’

and by its own affidavits, or by ‘depositions, answers to

interrogatories, and admissions on file,’ designate

specific facts showing that there is a genuine issue for

trial.”).

Additionally, the pooled funds were not retained in

accounts named after the commodity pools. E.g., (Doc. # 4-1

at ¶ 30) (discussing two accounts named “Fundadministration

Inc.” and “Fundadministration Inc./Mainstream Fund

Services”).

Further, within each entity, funding from participants

was commingled with funding used for other purposes. At

OIG, the bank account used to pay employees, principals,

and charges related to OIG’s properties consisted entirely

of participant funds provided for investment purposes.

(Doc. # 749-2 at 153:5-157:13). Similarly, the OM bank

account consisted primarily of participant funds. (Doc. #

4-1 at ¶¶ 44-45). DaCorta admitted to using some of the OM

account funds to purchase “at least two personal

residences, multiple luxury vehicles . . . , vacations, and

a trip on a private jet.” (Doc. # 749 at ¶ 50; Doc. # 757

at ¶ 50).

OIG and OM also insufficiently disclosed investment

risks to potential participants. OIG provided potential

participants with two documents: a “Promissory Note and

Loan Agreement” and an “Agreement and Risk Disclosures”

document. (Doc. # 749 at ¶ 62; Doc. # 757 at ¶ 62). The

Promissory Note and Loan Agreement guaranteed a minimum 12%

annual return on investment. (Doc. # 454 at 34). The

Agreement and Risk Disclosure also insufficiently alerted

participants to risks associated with foreign exchange

trading. See generally (Id. at 37-45) (excluding

disclosures required by 17 C.F.R. § 4.24(a)-(b)(2)); (Doc.

# 749 at ¶¶ 64-65).

OIG also did not provide required information to

participants about “fees and expenses incurred . . . , past

performance disclosures, [nor] a statement that the

[commodity pool operator] is required to provide all pool

participants with monthly or quarterly account statements,

as well as an annual report containing financial statements

certified by an independent public accountant.” (Doc. # 749

at ¶ 66) (noting that such disclosures are required by 17

C.F.R. § 4.24(d)-(w)); (Doc. # 454 at 34-45). Nor did OIG

provide information about the pools’ “aggregate

subscriptions . . . [,] current net asset value, or

information regarding the [pools’] largest draw downs.”

(Doc. # 749 at ¶ 67) (noting that such disclosures are

required by 17 C.F.R. § 4.25); (Doc. # 454 at 34-45).

Neither OIG nor OM have ever been registered with the

CFTC. (Doc. # 749 at ¶¶ 7, 12; Doc. # 757 at ¶¶ 7, 12).

C. DaCorta’s Relationship with the Oasis Entities

DaCorta played a leading role in the management and

operations of OIG and OM. DaCorta was a co-founder,

principal shareholder, and director of OIG. (Doc. # 749 at

¶ 3; Doc. # 757 at ¶ 3). He also acted as OIG’s Chief

Executive Officer and Chief Investment Officer. (Doc. # 749

at ¶ 4; Doc. # 757 at ¶ 4). In these positions, he was

responsible “for all investment decisions, trading

execution, services, sales, clearing, and operations.”

(Doc. # 749 at ¶ 4; Doc. # 757 at ¶ 4). He therefore

“served on the OIG Board of Directors, was a member of OIG,

was an officer of OIG, operated OIG, and controlled OIG.”

(Doc. # 749 at ¶ 8; Doc. # 757 at ¶ 8). DaCorta was also

the sole principal and general partner of OM. (Doc. # 749

at ¶ 10; Doc. # 757 at ¶ 10).

DaCorta played a prominent role in attracting new

participants to these entities. He participated in

conference calls with potential investors. (Doc. # 749-3 at

205:4-11, 206:8-15). He assured investors of a 12% annual

return and conveyed that his foreign exchange trading had

been profitable. (Doc. # 165-1 at ¶ 15). He further

informed call participants that trading risk was limited to

systematic risks. (Doc. # 749 at ¶¶ 30-31; Doc. # 757 at ¶¶

30-31). Finally, DaCorta also encouraged participants to

refer others to invest in the Oasis entities by promoting

opportunities to receive referral fees. (Doc. # 749 at ¶

32; Doc. # 757 at ¶ 32).

DaCorta was also responsible for all investment

decisions at the Oasis entities, including forex trading.

(Doc. # 749 at ¶ 68; Doc. # 757 at ¶ 68). He directed

deposits into the trading account for the OGFXSA, one of

the trading pools, and was listed as the sole trader in the

account applications for both pools. (Doc. # 749 at ¶¶ 69-

70; Doc. # 757 at ¶¶ 69-70). He was also the sole signatory

on OM bank accounts. (Doc. # 749 at ¶ 71; Doc. # 757 at ¶

71).

DaCorta also directed that participants be “issued

misleading account statements that concealed the trading

losses and misappropriation.” (Doc. # 749 at ¶ 45); (Doc. #

749-2 at 216:25-217:22) (stating that the investment portal

showed only “the amount of money lent and the amount of

accrued interest,” without showing losses); (Doc. # 749-3

at 216:25-217:18) (noting that portal setup was at

DaCorta’s direction). Specifically, these statements

prevented participants from viewing “profits, losses, or

fees attributable to their individual investments.” (Doc. #

749 at ¶ 72; Doc. # 757 at ¶ 72).

DaCorta was originally listed as a principal with the

National Futures Association (“NFA”) and registered with

the CFTC as an associated person of a Commodity Trading

Advisor from 2006 to 2010. (Doc. # 749 at ¶ 5; Doc. # 757

at ¶ 5). He withdrew both his registration and listing

after a 2010 settlement with the NFA. (Doc. # 749 at ¶ 5;

Doc. # 757 at ¶ 5). This settlement “barred him from

trading in any capacity that would require registration

with the NFA.” (Doc. # 749 at ¶ 6; Doc. # 757 at ¶ 6). He

never re-registered. (Doc. # 749 at ¶ 5; Doc. # 757 at ¶

5).

D. Forex Trading by the Oasis Entities

Over 800 participants invested over $75,000,000 in the

Oasis Entities. (Doc. # 165-1 at ¶ 12, 22; Doc. # 757 at ¶

33). Several participants contributed funding that

constituted a significant portion of their savings. See,

e.g., (Doc. # 756-8 at 19:7-20:18) (providing testimony

from Patti Katter that she wanted to invest in something

low risk and that the investment was a significant value

for her family).

Only approximately $22,000,000 of the funding

contributed was used for forex trading. (Doc. # 439 at 6).

DaCorta and other members of the entities misappropriated

over $28,000,000 of the funds invested by participants.

(Doc. # 165-1 at ¶ 23.d). The forex trading also was not

profitable. Between June 2015 and April 2015, the entities

had a net trading loss of $20,271,450.35. (Doc. # 749-4 at

165:19-167:1). Including fees and costs, losses totaled

over $62,000,000. (Id. at 167:2-6). On April 14, 2019, OIG

and OM, along with a related company SHC, owed participants

approximately $120,000,000. (Doc. # 165-1 at ¶ 23.a). On

this date, the entities had less than $10 million in

assets. (Id.). DaCorta was aware of these trading losses.

(Doc. # 749 at ¶¶ 42-43; Doc. # 757 at ¶¶ 42-43).

Profits were never returned to any bank account. (Doc.

# 749 at ¶ 41; Doc. # 757 at ¶ 41). Funds returned to

participants, totaling at least $30,364,607, were drawn

from investments by other participants. (Doc. # 439-7 at

16-17).

E. Related Criminal Proceeding

DaCorta was also prosecuted for several crimes based

on similar allegations to those underlying this complaint.

United States v. DaCorta, No. 8:19-cr-605-WFJ-CPT-1 (M.D.

Fla.). On May 4, 2022, a jury found DaCorta guilty of (1)

conspiracy to commit wire fraud and mail fraud, (2) money

laundering, and (3) making a false and fraudulent statement

on an income tax return. (Doc. # 749-9 at 2-3).

As to the count charging conspiracy to commit wire

fraud and mail fraud, the jury instructions stated that it

is “a Federal crime to knowingly and willfully conspire or

agree with someone to do something that, if actually

carried out, would result in the crime of wire fraud or

mail fraud.” (Doc. # 749-8 at 11). Importantly, DaCorta

needed to have “wrongful intent” to be guilty of

conspiracy. (Id. at 12). The instructions further defined

mail fraud and wire fraud, outlining that each requires

proof beyond a reasonable doubt that:

(1) the Defendant knowingly devised or

participated in a scheme to defraud someone, or

obtain money or property, using false or

fraudulent pretenses, representations, or

promises;

(2) the false or fraudulent pretenses,

representations, or promises were about a

material fact; [and]

(3) the Defendant intended to defraud someone . .

. .

(Id. at 14); (Id. at 16) (similar).

Additionally, mail fraud requires that the Defendant

used the services of a requisite mail carrier or the United

States Postal Service to help carry out the scheme. (Id. at

14). Similarly, wire fraud requires that “the Defendant

transmitted or caused to be transmitted by wire some

communication in interstate commerce to help carry out the

scheme to defraud.” (Id. at 16).

In total, the criminal trial established that

participants lost at least $53,270,336.08 from the

operations of the Oasis entities. (Doc. # 749-12 at 7). It

also determined that DaCorta personally obtained and

dissipated at least $2,817,876.16 in proceeds from his

conspiracy to commit wire fraud and mail fraud and money

laundering offenses. (Id. at 9).

II. Legal Standard

Summary judgment is appropriate “if the movant shows

that there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a). A factual dispute alone cannot

defeat a properly pled motion for summary judgment; only a

genuine issue of material fact will preclude summary

judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

247–48 (1986).

An issue is genuine if the evidence is such that a

reasonable jury could return a verdict for the non-moving

party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739,

742 (11th Cir. 1996) (citing Hairston v. Gainesville Sun

Publ’g Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is

material if it may affect the outcome of the suit under the

governing law. Allen v. Tyson Foods, Inc., 121 F.3d 642,

646 (11th Cir. 1997).

The moving party bears the initial burden of showing

the court, by reference to materials on file, that there

are no genuine issues of material fact that should be

decided at trial. Hickson Corp. v. N. Crossarm Co., 357

F.3d 1256, 1260 (11th Cir. 2004) (citing Celotex Corp., 477

U.S. at 323). “When a moving party has discharged its

burden, the non-moving party must then ‘go beyond the

pleadings,’ and by its own affidavits, or by ‘depositions,

answers to interrogatories, and admissions on file,’

designate specific facts showing that there is a genuine

issue for trial.” Jeffery v. Sarasota White Sox, Inc., 64

F.3d 590, 593–94 (11th Cir. 1995) (quoting Celotex Corp.,

477 U.S. at 324).

If there is a conflict between the parties’

allegations or evidence, the non-moving party’s evidence is

presumed to be true and all reasonable inferences must be

drawn in the non-moving party’s favor. Shotz v. City of

Plantation, 344 F.3d 1161, 1164 (11th Cir. 2003). If a

reasonable fact finder evaluating the evidence could draw

more than one inference from the facts, and if that

inference introduces a genuine issue of material fact, the

court should not grant summary judgment. Samples ex rel.

Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir.

1988). But, if the non-movant’s response consists of

nothing “more than a repetition of his conclusional

allegations,” summary judgment is not only proper, but

required. Morris v. Ross, 663 F.2d 1032, 1034 (11th Cir.

1981).

Further, the filing of cross-motions for summary

judgment does not give rise to any presumption that no

genuine issues of material fact exist. Rather, “[c]ross-

motions must be considered separately, as each movant bears

the burden of establishing that no genuine issue of

material fact exists and that it is entitled to judgment as

a matter of law.” Shaw Constructors v. ICF Kaiser Eng’rs,

Inc., 395 F.3d 533, 538-39 (5th Cir. 2004); see also United

States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984)

(“Cross-motions for summary judgment will not, in

themselves, warrant the court in granting summary judgment

unless one of the parties is entitled to judgment as a

matter of law on facts that are not genuinely disputed[.]”

(citation omitted)).

Finally, collateral estoppel can establish that a

genuine dispute of material fact does not exist.

Specifically, collateral estoppel “bar[s] a defendant who

is convicted in a criminal trial from contesting this

conviction in a subsequent civil action with respect to

issues necessarily decided in the criminal trial.”

Securities & Exchange Comm’n v. Rand, 805 F. App’x 871, 875

(11th Cir. 2020) (citing United States v. Jean-Baptiste,

395 F.3d 1190, 1194 (11th Cir. 2005)). Collateral estoppel

applies if (1) “the issue in question [is] ‘identical in

both the prior and current action,’” (2) “the issue [was]

‘actually litigated’ in the criminal trial”, (3) “the

determination of the issue [was] ‘critical and necessary to

the judgment in the prior action,’” and (4) “the burden of

persuasion in the subsequent action [is not] ‘significantly

heavier.’” Jean-Baptiste, 395 F.3d at 1195 (quoting In re

Bilzerian, 153 F.3d 1278, 1281 (11th Cir. 1998)).

“When the criminal conviction was based on a jury

verdict of guilty, ‘issues which were essential to the

verdict must be regarded as having been determined by the

judgment.’” Rand, 805 F. App’x at 875 (quoting Wolfson v.

Baker, 623 F.2d 1074, 1078 (5th Cir. 1980)). To determine

which issues were essential, “the court may ‘examine the

record of [the] prior proceeding, taking into account the

pleadings, evidence, charge, and other relevant matter, and

conclude whether a rational jury could have grounded its

verdict upon an issue other than that which the defendant

seeks to foreclose from consideration.’” Id. (quoting Ashe

v. Swenson, 397 U.S. 436, 444 (1970)).

III. Analysis

A. Michael J. DaCorta’s Motion for Summary Judgment

DaCorta contends that he is entitled to summary

judgment on all of the CFTC’s claims because the CFTC has

not met its burden on any of the elements of its claims.

For the reasons explained below, DaCorta’s Motion for

Summary Judgment is denied.

As a preliminary matter, this Court notes that it

agrees with the CFTC’s assessment that DaCorta’s Motion

does not comply with the Court’s order regarding summary

judgment motions. (Doc. # 756 at 1). The Motion does not

contain a section titled “Statement of Material Facts” with

each fact “supported by a pinpoint citation to the specific

part of the record relied upon to support that fact.” (Doc.

# 659 at 2). Violation of this order does constitute

grounds for denial of the motion. See Id. (“Failure to

submit a proper statement of material facts constitutes

grounds for denial of the motion.”). Even so, this Court

will briefly address the arguments raised in the motion.

DaCorta makes two arguments: (1) OIG and OM were not a

Ponzi scheme, as OIG was always solvent, and (2) the Oasis

entities did not operate commodity pools.

First, DaCorta argues that OIG and OM were not Ponzi

schemes because they were solvent. (Doc. # 750 at 34-37).

It is true that Ponzi schemes must be insolvent. See Wiand

v. Lee, 753 F.3d 1194, 1201 n.3 (11th Cir. 2014) (“[T]he

Ponzi scheme operator’s insolvency[] is necessarily present

in every Ponzi scheme.”). However, DaCorta does not clarify

how lack of conformity to this definition precludes the

CFTC’s success on any of the claims raised in this case.

Solvency and the presence of a Ponzi scheme are not

elements of any of the claims and, therefore, not relevant

to their resolution. See (Doc. # 756 at 17) (“[T]he CFTC

did not charge DaCorta . . . with ‘insolvency’ or with any

violations that require proof of insolvency as an element .

. . . [A] determination that DaCorta operated a Ponzi

scheme is not an element of any of the CFTC’s five counts

against DaCorta.”). DaCorta’s emphasis on these concepts is

misplaced.

The Court also acknowledges the concerns the CFTC

raises about the evidence DaCorta offers in support of his

insolvency and Ponzi scheme arguments. (Doc. # 756 at 19-

24). Given that the Court agrees with the CFTC that this

argument does not impact whether the CFTC may be granted

summary judgment on the counts alleged, this Court will not

further expound upon the insufficiencies of the evidence

provided.

Second, DaCorta argues that the Oasis entities did not

operate commodity pools. (Doc. # 750 at 37-42). Instead,

DaCorta argues that OIG and OM were eligible contract

participants (“ECPs”) and the CFTC does not have

jurisdiction over them. (Id. at 38-39).

A commodity pool is “any investment trust, syndicate,

or similar form of enterprise operated for the purpose of

trading in commodity interests.” 7 U.S.C. § 1a(10)(A).

These pools include any “agreement, contract, or

transaction described in section 2(c)(2)(C)(i) of this

title or section 2(c)(2)(D)(i) of this title,” which

include forex transactions. Id. § 1(a)(10)(A)(ii); Id. §

2(c)(2)(C)(i). “[A]ggregation of investors’ funds into a

single account” is an essential aspect of a commodity pool.

Commodity Futures Trading Comm’n v. Amerman, 645 F. App’x

938, 941-42 (11th Cir. 2016) (quoting Commodity Futures

Trading Comm’n v. Perkins, No. 06-4674 (RBK), 2009 WL

806576, at *4 (D.N.J. Mar. 25, 2009)). Here, no dispute

exists that funds from participants were aggregated into

entities OM and OIG. (Doc. # 749 at ¶¶ 21-25; Doc. # 757 at

¶¶ 21-25) (disputing the CFTC’s facts only as they included

terms such as “pool participants”). Additionally, the

record is clear that such funds were invested for trading

in commodity interests. (Doc. # 749 at ¶¶ 9, 11; Doc. #

749-2 at 94:1-8; Doc. # 749-3 at 50:5-10).

No additional dispute is raised by the nature of the

investment system used by the Oasis entities. Whether

participation is based on a promissory note system as

opposed to direct investing does not affect whether these

entities can be classified as commodity pools. See

Commodity Futures Trading Comm’n v. Collins, No. 94 C 4375,

1997 WL 106135, at *2 (N.D. Ill. Feb. 10, 1997)

(determining that a commodity pool existed even where some

participants were told their transactions were loans).

Instead, the focus is on the aggregation of funds for

trading.

Further, the Oasis entities do not qualify as ECPs.

“[C]ommodity pool[s] in which any participant is not

otherwise an eligible contract participant” cannot be ECPs.

7 U.S.C. § 1a(18)(A)(iv)(II). Therefore, if any of the

participants in the Oasis entities were not ECPs, the pools

themselves do not qualify as ECPs.

No genuine dispute exists regarding whether these

pools included individuals who do not meet the definition

of an ECP. An individual qualifies as an ECP if they

“ha[ve] amounts invested on a discretionary basis, the

aggregate of which is in excess of . . . $10,000,000; or .

. . $5,000,000 and who enters into an agreement, contract,

or transaction in order to manage the risk . . . .” Id. §

1a(18)(A)(xi).

Several of the participants provided sworn testimony

that demonstrates that they do not qualify as an ECP. For

example, Ms. Patti Katter invested $100,000 in the pools,

which was a significant value for her family. (Doc. # 756-8

at 19:7-20:18). Ms. Katter “wanted to invest in something

that [she] knew [she] wouldn't be able to lose the money

because [her family was] in a really big pinch at the

time.” (Id. at 19:2-4). Ms. Katter testified that her

husband had suffered an injury while in the military. (Id.

at 41:8-11). As a result, she was unable to work full-time,

and could not save money for her children’s education, nor

to help them buy cars or provide for their weddings. (Id.

at 41:14-18). The investment was the family’s “little

cushion that was taken from [them].” (Id. at 41:20-22).

Similarly, Mr. Anthony Charles invested $100,000 and

noted that the loss has had a significant impact on his

family. (Doc. # 756-6 at 137:6-138:12). Specifically, he

could no longer send his son to private school and remains

financially impacted by the loss. (Id. at 138:14-23).

Based on these facts, these individuals could not have

had sufficient “amounts invested on a discretionary basis”

to qualify as ECPs. Therefore, neither OIG nor OM is an

ECP. Instead, they are commodity pools subject to the

jurisdiction of the CFTC. See 7 U.S.C. § 2(c)(2)(B)(i)(II)

(“[T]he Commission shall have jurisdiction over[] an

agreement, contract, or transaction in foreign currency

that . . . is offered to, or entered into with, a person

that is not an eligible contract participant . . . .”).

Finally, as part of this argument, DaCorta asserts

that OIG and OM did not engage in retail forex

transactions. (Doc. # 750 at 38). A retail forex

transaction is “any account, agreement, contract or

transaction described in section 2(c)(2)(B) or 2(c)(2)(C)

of the Act.” 17 C.F.R. § 5.1(m). This definition excludes

such transactions “that [are] contract[s] of sale of a

commodity for future delivery . . . that [are] executed,

traded on or otherwise subject to the rules of a contract

market.” Id.

DaCorta has openly acknowledged that he engaged in

forex transactions through OIG and OM. (Doc. # 749 at ¶ 68;

Doc. # 757 at ¶ 68). Additionally, no evidence has been

provided that DaCorta and his entities should be excluded

from the retail forex transaction definition through the

exception regarding contract markets.

The CFTC has jurisdiction over forex transactions. 7

U.S.C. § 2(c)(2)(C)(i)(I). Therefore, the CFTC has

jurisdiction over the Oasis pools and their retail forex

transactions.

B. Commodity Futures Trading Commission’s Motion for

Summary Judgment

The CFTC seeks summary judgment on all counts of the

Amended Complaint: (1) violations of Section 4(b)(a)(2)(A)-

(C) of the Act and Regulation 5.2(b) for forex fraud by

misrepresentations, omissions, false statements, and

misappropriation; (2) violation of Section 4o(1)(A)-(B) of

the Act for fraud and deceit by commodity pool operators

and associated persons of commodity pool operators; (3)

violation of Sections 2(c)(2)(C)(iii)(1)(cc), 4k(2), 4m(1)

of the Act and Regulation 5.3(a)(2) for failure to register

as a commodity pool operator and retail forex commodity

pool operator and associated person of a commodity pool

operator and associated person of retail forex commodity

pool operator; (4) violation of Regulation 4.20(b)-(c) for

failure to receive pool funds in pools’ names and

commingling pool funds; and (5) violation of Regulation

4.21 for failure to provide pool disclosures. (Doc. # 749

at 20). The Court will address each count in turn.

As an initial matter, the Act establishes that a

controlling person of an entity may be liable for that

entity’s violations of the Act if they either “did not act

in good faith or knowingly induced, directly or indirectly,

the act or acts constituting the violation.” 7 U.S.C. §

13c(b). For the CFTC to demonstrate that DaCorta knowingly

induced the violative acts, the agency “must show that the

controlling person had actual or constructive knowledge of

the core activities that make up the violation at issue and

allowed them to continue.” Commodity Futures Trading Comm’n

v. R.J. Fitzgerald & Co., Inc., 310 F.3d 1321, 1334 (11th

Cir. 2002). To qualify, the individual must “possess[],

directly or indirectly, the power to direct or cause the

direction of the management and policies of [the] entity.”

(Doc. # 749 at 31). Given DaCorta’s role as a co-founder,

principal shareholder, and director of OIG, as well as sole

principal and general partner of OM, (Id. at ¶¶ 3, 10; Doc.

# 757 at ¶¶ 3, 10), he qualifies as a controlling person

under this provision and may be held liable for the

violations by these entities, where appropriate. As

discussed below, DaCorta knowingly induced the violations

by OIG and OM and failed to act in good faith through his

intent to defraud. Therefore, he may be held liable for the

violations by the Oasis entities.

1. Forex fraud by misrepresentations,

omissions, false statements, and

misappropriation

In Count I, the CFTC alleges that DaCorta has violated

Section 4b(a)(2)(A)-(C) of the Act, 7 U.S.C. § 6b(a)(2)(A)-

(C), and Regulation 5.2(b), 17 C.F.R. § 5.2(b), by

committing forex fraud by misrepresentations, omissions,

false statements, and misappropriation. (Doc. # 110 at ¶¶

118-29).

Section 4b(a)(2)(A)-(C) provides:

It shall be unlawful . . . for any person, in or

in connection with any order to make, or the

making of, any contract of sale of any commodity

for future delivery, or swap, . . .

(A) to cheat or defraud or attempt to cheat or

defraud the other person;

(B) willfully to make or cause to be made to the

other person any false report or statement or

willfully to enter or cause to be entered for the

other person any false record;

(C) willfully to deceive or attempt to deceive

the other person by any means whatsoever in

regard to any order or contract . . . .

7 U.S.C. § 6b(a)(2)(A)-(C).

Section 4b applies to forex transactions entered into

with non-eligible contract participants. 7 U.S.C. §

2(c)(2)(C)(i), (iv). Therefore, it applies to DaCorta and

his entities.

Regulation 5.2(a)-(b), 17 C.F.R. § 5.2(a)-(b),

similarly prohibits such activity in any retail forex

transactions, such as those conducted by DaCorta.

The CFTC must prove three elements to establish

liability for fraud under Section 4b: “(1) the making of a

misrepresentation, misleading statement, or a deceptive

omission; (2) scienter; and (3) materiality.” R.J.

Fitzgerald & Co., Inc., 310 F.3d at 1328.

The CFTC has established that there is no genuine

dispute of material fact that DaCorta violated both Section

4b and Regulation 5.2(a)-(b).

First, as the jury in the related criminal proceedings

found DaCorta guilty of conspiracy to commit wire fraud and

mail fraud, DaCorta is necessarily precluded from arguing

the elements of scienter and materiality.2

Scienter requires that the “Defendant intended to

defraud, manipulate, or deceive, or [that] Defendant’s

conduct represents an extreme departure from the standards

of ordinary care.” R.J. Fitzgerald & Co., Inc., 310 F.3d at

1328-29. To find DaCorta guilty of conspiracy to commit

mail and wire fraud, the jury must have determined that he

had intent to defraud. See (Doc. # 749-8 at 14, 16)

(including that “the Defendant intended to defraud someone”

as an element of mail and wire fraud).

Further, a misrepresentation, misleading statement, or

deceptive omission is material “if a reasonable investor

2 DaCorta argues that collateral estoppel cannot be applied

in this case as his appeal has not yet been decided. (Doc.

# 757 at 26). However, a pending appeal generally does not

prevent the applicability of collateral estoppel. United

States v. Internat’l Brotherhood of Teamsters, Chauffeurs,

Warehousemen & Helpers of America, 905 F.2d 610, 621 (2d

Cir. 1990).

would consider it important in deciding whether to make an

investment.” R.J. Fitzgerald & Co., Inc., 310 F.3d at 1329.

As above, the jury must have determined that DaCorta’s

false statements were about a material fact. See (Doc. #

749-8 at 14, 16) (including that “the false or fraudulent

pretenses, representations, or promises were about a

material fact” as an element of mail and wire fraud).

Second, there is no genuine dispute of material fact

that DaCorta made “misrepresentation[s], misleading

statement[s], or [] deceptive omission[s].” R.J. Fitzgerald

& Co., Inc., 310 F.3d at 1328.

While DaCorta disputes the CFTC’s use of terms like

“pool participants” and “Oasis pools,” he does not deny the

underlying facts demonstrating that he made

misrepresentations. (Doc. # 757 at ¶¶ 26-29). These facts

include misrepresentations that all funding would be used

in forex trading, participants were guaranteed to “earn a

minimum . . . 12% annually,” the forex trading had been

profitable, no trading risk existed other than systematic

risk, and participants would receive referral fees when

they introduced additional participants. (Doc. # 749 at ¶¶

26-32; Doc. # 165-1 at ¶ 15; Doc. # 757 at ¶¶ 30-32).

Consequently, DaCorta also made several material

omissions, including that only some of the participant

funds were used in forex trading, the pools suffered net

losses, payments to participants were drawn from funds

contributed by other participants, and some funding was

misappropriated to fund DaCorta’s lifestyle. (Doc. # 439 at

6; Doc. # 439-7 at 16-17; Doc. # 749 at ¶¶ 33, 35-41, 49-

52; Doc. # 749-4 at 165:19-167:6; Doc. # 757 at ¶ 41-42).

DaCorta also did not inform participants that he had

previously been barred from trading in a way requiring NFA

registration and that neither he nor the Oasis entities

were registered with the CFTC, retained appropriate

records, nor had the ability to return participants’

principal. (Doc. # 165-1 at ¶ 23.a; Doc. # 749 at ¶¶ 5-7,

9-15, 33-34, 39, 41-43; Doc. # 757 at ¶¶ 5-7, 10, 12-15).

DaCorta further misled participants by

misappropriating funds. He did so by storing participant

funds in an account used for business and personal

expenses, using such funds for these purposes, and paying

participants from funds contributed by other participants.

(Doc. # 4-1 at ¶¶ 44-45, 57; Doc. # 439-7 at 16-17; Doc. #

749 at ¶¶ 16-18, 46-52; Doc. # 749-2 at 153:5-157:13; Doc.

# 757 at ¶ 50).

Therefore, no genuine dispute of material fact exists

that DaCorta violated Section 4b(a)(2)(A)-(C) of the Act.

As Regulation 5.2(b) mirrors Section 4b(a)(2)(A)-(C), the

CFTC has also established that DaCorta violated this

regulation.

2. Fraud and deceit by CPOs and APs of CPOs

In Count II, the CFTC asserts that DaCorta has

violated Section 4o(1)(A)-(B), 7 U.S.C. § 6o(1)(A)-(B), of

the Act by committing fraud and deceit as a CPO and AP of a

CPO. (Doc. # 110 at ¶¶ 130-45).

Section 4o(1) provides:

“It shall be unlawful for a commodity trading

advisor, associated person of a commodity trading

advisor, commodity pool operator, or associated

person of a commodity pool operator, by use of

the mails or any means or instrumentality of

interstate commerce, directly or indirectly—

(A) to employ any device, scheme, or artifice to

defraud any client or participant or prospective

client or participant; or

(B) to engage in any transaction, practice, or

course of business which operates as a fraud or

deceit upon any client or participant or

prospective client or participant.

7 U.S.C. § 6o(1)(A)-(B) (emphasis added). Section

4o(1)(A) requires knowing conduct, while Section

4o(1)(B) does not. Messer v. E.F. Hutton & Co., 847

F.2d 673, 678-79 (11th Cir. 1988).

A commodity pool operator (“CPO”) is defined as:

[A]ny person . . . engaged in a business that is

of the nature of a commodity pool, investment

trust, syndicate, or similar form of enterprise,

and who, in connection therewith, solicits,

accepts, or receives from others, funds,

securities, or property, either directly or

through capital contributions, the sale of stock

or other forms of securities, or otherwise, for

the purpose of trading in commodity interests,

including any—

(I) commodity for future delivery, security

futures product, or swap;

(II) agreement, contract, or transaction

described in section 2(c)(2)(C)(i) of this title

or section 2(c)(2)(D)(i) of this title . . . .

7 U.S.C. § 1a(11)(A)(i)(I)-(II).

Further, a retail forex CPO is “any person who

operates or solicits funds, securities, or property for a

pooled investment vehicle that is not an eligible contract

participant . . . , and that engages in retail forex

transactions.” 17 C.F.R. § 5.1(d)(1).

Additionally, an associated person of a CPO includes:

[A]ny natural person who is associated in any of

the following capacities with: (1) A futures

commission merchant as a partner, officer, or

employee (or any natural person occupying a

similar status or performing similar functions),

in any capacity which involves

(i) The solicitation or acceptance of customers’

orders (other than in a clerical capacity) or

(ii) the supervision of any person or persons so

engaged.

Id. § 1.3.

An AP of a retail forex CPO is defined as:

[A]ny natural person associated with a commodity

pool operator as defined in paragraph (d)(1) of

this section as a partner, officer, employee,

consultant or agent (or any natural person

occupying a similar status or performing similar

functions), in any capacity which involves:

(i) The solicitation of funds, securities, or

property for a participation in a pooled

investment vehicle; or

(ii) The supervision of any person or persons so

engaged.

Id. § 5.1(d)(2).

There is no genuine dispute of material fact that both

OIG and OM were both CPOs and retail forex CPOs. As

discussed above, they both operated commodity pools by

soliciting and receiving funds for pooled trading in

commodity futures. Additionally, they are retail forex CPOs

as they both operated and solicited funding for pooled

investment and engaged in retail forex trading. Further,

neither entity qualifies as an ECP.

Additionally, there is no genuine dispute of material

fact that DaCorta was both an AP of a CPO and an AP of a

retail forex CPO. He solicited and accepted participant

funds on behalf of the Oasis entities. (Doc. # 749 at ¶ 68;

Doc. # 749-3 at 205:4-11, 206:8-15; Doc. # 757 at ¶ 68).

Therefore, no genuine dispute of material fact exists

that, by engaging in a scheme to defraud current and

potential participants, DaCorta violated Section 4o(1)(A)-

(B). DaCorta acted with intent to defraud participants and

actually did defraud them through his work with OIG and OM,

causing millions of dollars in losses. (Doc. # 749-8 at 14,

16).

3. Failure to register as a CPO and retail

forex CPO and AP of a CPO and AP of retail

forex CPO

In Count III, the CFTC asserts that DaCorta has

violated Sections 2(c)(2)(C)(iii)(1)(cc), 4k(2), 4m(1) of

the Act, 7 U.S.C. §§ 2(c)(2)(C)(iii)(1)(cc), 6k(2), 6m(1),

and Regulation 5.3(a)(2), 17 C.F.R. § 5.3(a)(2), by failing

to register as a CPO and retail forex CPO and AP of a CPO

and AP of retail forex CPO. (Doc. # 110 at ¶¶ 146-65).

The Act and supporting regulations require that CPOs,

retail forex CPOs, APs of CPOs, and APs of retail forex

CPOs register as such. 7 U.S.C. § 6m(1) (establishing a

registration requirement for CPOs); 17 C.F.R. §

5.3(a)(2)(i) (similar for retail forex CPOs); 7 U.S.C. §

2(c)(2)(C)(iii)(I)(cc) (establishing a registration

requirement for APs of CPOs); Id. § 6k(2) (similar); 17

C.F.R. § 5.3(a)(2)(ii) (similar for APs of retail forex

CPOs).

As discussed above, there is no genuine dispute of

material fact that OIG and OM were CPOs and retail forex

CPOs. Nor is there any similar dispute as to whether

DaCorta was an AP of CPOs and retail forex CPOs.

DaCorta admits that neither OIG nor OM was registered

as a CPO or a retail forex CPO. (Doc. # 749 at ¶¶ 7, 12;

Doc. # 757 at ¶¶ 7, 12). Additionally, he admits that he

was not registered as an AP of a CPO or retail forex CPO.

(Doc. # 749 at ¶ 5; Doc. # 757 at ¶ 5). Therefore, the CFTC

has met its burden of proof regarding this count.

4. Failure to Receive Pool Funds in Pools’

Names and Commingling Pool Funds

In Count IV, the CFTC asserts that DaCorta has

violated Regulation 4.20(b)-(c), 17 C.F.R. § 4.20(b)-(c),

by failing to receive pool funds in pools’ names and

commingling pool funds. (Doc. # 110 at ¶¶ 166-73).

Regulation 4.20(b) provides that “[a]ll funds,

securities or other property received by a commodity pool

operator from an existing or prospective pool participant

for the purchase of an interest or as an assessment

(whether voluntary or involuntary) on an interest in a pool

that it operates or that it intends to operate must be

received in the pool’s name.” 17 C.F.R. § 4.20(b).

Regulation 4.20(c) provides that “[n]o commodity pool

operator may commingle the property of any pool that it

operates or that it intends to operate with the property of

any other person.” Id. § 4.20(c). These regulations apply

to anyone who is required to register as a CPO. Id. § 5.4.

The Oasis entities did not receive participant funds

in the names of the pools. (Doc. # 4-1 at ¶ 30).

Additionally, the pools’ property was commingled with the

property of others. (Id. at ¶¶ 44-45, 57; Doc. # 749 at ¶

50; Doc. # 749-2 at 153:5-157:13; Doc. # 757 at ¶ 50).

Therefore, no genuine dispute of material fact exists

that OM and OIG violated these provisions.

5. Failure to Provide Pool Disclosures

In Count V, the CFTC asserts that DaCorta has violated

Regulation 4.21, 17 C.F.R. § 4.21, by failing to provide

pool disclosures. (Doc. # 110 at ¶¶ 174-80).

Regulation 4.21 provides:

[E]ach commodity pool operator registered or

required to be registered under the Act must

deliver or cause to be delivered to a prospective

participant in a pool that it operates or intends

to operate a Disclosure Document for the pool

prepared in accordance with §§ 4.24 and 4.25 by

no later than the time it delivers to the

prospective participant a subscription agreement

for the pool.

17 C.F.R. § 4.21.

This regulation applies to anyone required to register

as a CPO under provisions relating to forex transactions.

See Id. § 5.4.

No genuine dispute of material fact exists that OIG

did not provide disclosures to potential participants as

required by Regulations 4.24 and 4.25. See (Doc. # 454 at

34-45) (excluding such disclosures from documents provided

to potential participants). Therefore, the CFTC has carried

its burden regarding this count.

IV. Remedies

The CFTC has requested (1) injunctive relief, (2)

restitution, and (3) a civil penalty to be leveraged

against DaCorta. Considering the facts of this case, the

Court determines it is appropriate to award all three forms

of relief.

A. Injunctive Relief

The CFTC requests that the Court enter a permanent

injunction against DaCorta pursuant to Section 6c(a) of the

Act, 7 U.S.C. § 13a-1(a). This provision states that the

CFTC may bring suit to enjoin violations of the Act and its

supporting regulations, as well as enforce compliance with

such rules, when it appears that a person “has engaged, is

engaging, or is about to engage in any act or practice

constituting a violation of any provision of this chapter

or any rule, regulation, or order thereunder.” Id. “Upon a

proper showing, a permanent or temporary injunction or

restraining order shall be granted without bond.” Id. §

13a-1(b).

A court may issue a statutory injunction under this

provision based only on “[a] prima facie case of

illegality;” the CFTC does not need to prove “irreparable

injury or the inadequacy of other remedies.” Commodity

Futures Trading Comm’n v. Muller, 570 F.2d 1296, 1300 (5th

Cir. 1978). To determine the appropriateness of an

injunction, the Court focuses on “whether the defendant’s

past conduct indicates that there is a reasonable

likelihood of further violations in the future.” Commodity

Futures Trading Comm’n v. Wilshire Inv. Mgmt. Corp., 531

F.3d 1339, 1346 (11th Cir. 2008) (quoting SEC v.

Caterinicchia, 613 F.2d 102, 105 (5th Cir. 1980)).

The Court considers several factors in this analysis.

The primary factor is the defendant’s past illegal conduct.

Id. However, the Court also considers (1) “[t]he

egregiousness of the defendant’s actions,” (2) whether the

violation was isolated or recurrent, (3) “the degree of

scienter involved,” (4) “the sincerity of the defendant’s

assurances against future violations,” (5) the defendant’s

recognition that his conduct was wrongful, and (6) “the

likelihood that the defendant’s occupation will present

opportunities for future violations.” Id. (quoting SEC v.

Carriba Air, Inc., 681 F.2d 1318, 1322 (11th Cir. 1982)).

This determination is made based on the totality of the

circumstances. Commodity Futures Trading Comm’n v. Altamont

Global Partners, LLC, No. 6:12-cv-1095-GAP-TBS, 2014 WL

644693, at *11 (M.D. Fla. Feb. 19, 2014).

Here, the Court determines that it is appropriate to

permanently enjoin DaCorta from further violations of the

Act and supporting regulations, as well as from other

activities that would present opportunities for further

violations. Each of the factors weighs in favor of granting

an injunction, and the severity of DaCorta’s violations

justify a permanent injunction.

As the above discussion highlights, DaCorta violated

multiple provisions of the Act and its supporting

regulations. In doing so, he harmed over 800 participants

and caused at least $53,270,336.08 in damages. (Doc. # 165-

1 at ¶ 12; Doc. # 749-12 at 7-8). Additionally, given

DaCorta’s role in OIG and OM (Doc. # 749 at ¶¶ 3-4, 8, 10;

Doc. # 757 at ¶¶ 3-4, 8, 10), he played a significant role

in shaping the actions of those entities. DaCorta’s actions

persisted over the course of OIG and OM’s operations and

his actions were at least reckless, if not willful. E.g.,

(Doc. # 749-8 at 14, 16). Additionally, DaCorta maintains

that he is not liable for this conduct. E.g., (Doc. # 757

at ¶ 57) (“DaCorta admits he was found guilty beyond a

reasonable doubt but strongly denies he is in fact guilty

of such offense. DaCorta specifically testified he did not

intend to deceive or cheat investors . . . .”).

Additionally, these violations occurred despite a 2010

settlement under which DaCorta agreed not to engage in

activities requiring NFA registration. (Doc. # 749 at ¶ 5;

Doc. # 757 at ¶ 5).

The Court therefore enjoins DaCorta from directly or

indirectly violating the Act and its supporting regulations

by:

•

Cheating or defrauding, or attempting to cheat or

defraud, other persons in or in connection with any

order to make, or the making of, any contract of sale

of any retail forex transaction that is made, or to be

made, for or on behalf of, or with, any other person,

in violation of Section 4b(a)(2)(A)–(C) of the Act, 7

U.S.C. § 6b(a)(2)(A)–(C), and Regulation 5.2(b)(1)-

(3), 17 C.F.R. § 5.2(b)(1)-(3);

•

Employing any device, scheme, or artifice to defraud

any client or participant or prospective client or

participant, or engaging in any transaction, practice

or course of business which operates as a fraud or

deceit upon any client or participant or prospective

participant in violation of Section 4o(1)(A)–(B) of

the Act, 7 U.S.C. § 6o(1)(A)–(B);

•

Being associated with a CPO as a partner, officer,

employee, consultant, or agent, or a person occupying

a similar status or performing similar functions, in

any capacity that involves the solicitation of funds,

securities, or property for participation in a retail

forex pool without being registered with the CFTC as

an AP of the CPO, in violation of Sections

2(c)(2)(C)(iii)(I)(cc) and 4k(2) of the Act, 7 U.S.C.

§§ 2(c)(2)(C)(iii)(I)(cc), 6k(2), and Regulation

5.3(a)(2), 17 C.F.R. § 5.3(a)(2);

•

Failing to operate a commodity pool as an entity

cognizable as a legal entity separate from that of the

pool operator, in violation of Regulation 4.20(a)(1),

17 C.F.R. § 4.20(a)(1);

•

Failing to require that all funds, securities, or

other property received by a CPO from a prospective or

existing pool participant be received in the commodity

pool’s name, in violation of Regulation 4.20(b), 17

C.F.R. § 4.20(b);

•

Commingling the property of a commodity pool in

violation of Regulation 4.20(c), 17 C.F.R. § 4.20(c);

and

•

Failing to provide prospective pool participants with

pool disclosure documents in the form specified in

Regulations 4.24 and 4.25, 17 C.F.R. §§ 4.24, 4.25, in

violation of Regulation 4.21, 17 C.F.R. § 4.21.

The Court further enjoins DaCorta from directly or

indirectly:

•

Trading on or subject to the rules of any registered

entity (as that term is defined in Section 1a(40) of

the Act, 7 U.S.C. § 1a(40));

•

Entering into any transactions involving “commodity

interests” (as that term is defined in Regulation 1.3,

17 C.F.R. § 1.3), for his own personal account or for

any account in which he has a direct or indirect

interest;

•

Having any commodity interests traded on his behalf;

•

Controlling or directing the trading for or on behalf

of any other person or entity, whether by power of

attorney or otherwise, in any account involving

commodity interests;

•

Soliciting, receiving, or accepting any funds from any

person for the purpose of purchasing or selling any

commodity interests;

•

Applying for registration or claiming exemption from

registration with the CFTC in any capacity, and

engaging in any activity requiring such registration

or exemption from registration with the CFTC, except

as provided for in Regulation 4.14(a)(9), 17 C.F.R. §

4.14(a)(9); and

•

Acting as a principal (as that term is defined in

Regulation 3.1(a), 17 C.F.R. § 3.1(a)), agent or any

other officer or employee of any person (as that term

is defined in Section 1a(38) of the Act, 7 U.S.C. §

1a(38)), registered, exempted from registration or

required to be registered with the CFTC except as

provided for in 17 C.F.R. § 4.14(a)(9).

B. Restitution

Section 6c(d)(3) also permits the award of equitable

remedies including “restitution to persons who have

sustained losses proximately caused by such violation (in

the amount of such losses).” 7 U.S.C. § 13a-1(d)(3)(A); see

also Smithers, 2013 WL 4851684, at *11 (calculating

restitution based on the “amount of customer losses”).

The related criminal proceeding determined that

DaCorta’s actions resulted in at least $53,270,336.08 of

loss. (Doc. # 749-12 at 7-8). Therefore, the Court

determines that DaCorta shall pay $53,270,336.08 plus post-

judgment interest.

C. Civil Penalty

Section 6c also provides for the award of civil

penalties. 7 U.S.C. § 13a-1(d). Violations committed

between October 23, 2012, and November 1, 2015, may not

exceed the greater of $140,000 or “triple the monetary gain

to the person for each violation.” Id. § 13a-1(d)(1)(A); 17

C.F.R. § 143.8(b)(1). Violations committed after November

2, 2015, may not exceed the greater of $214,514 or “triple

the monetary gain to the person for each violation.” 7 §

U.S.C. 13a-1(d)(1)(A); 17 C.F.R. § 143.8(b)(1).

To determine the appropriate value of a civil penalty,

courts have considered “the general seriousness of the

violation,” including whether the violation was of a core

provision of the Act and whether scienter existed, as well

as any aggravating or mitigating circumstances. Wilshire

Inv. Mgmt. Corp., 531 F.3d at 1346. Additionally, courts

consider the consequences of the violations and harm to

both consumers and the market. U.S. Commodity Futures

Trading Comm’n v. Gutterman, No. 12-21047-CIV, 2012 WL

2413082, at *10 (S.D. Fla. June 26, 2012). Penalties must

be “rationally related to the offense charged or the need

for deterrence.” U.S. Commodity Futures Trading Comm’n v.

Levy, 541 F.3d 1102, 1112 (11th Cir. 2008). Courts often

calculate monetary gain by subtracting funds paid to

customers and trading losses from the total value provided

by participants into a fund. E.g., Smithers, 2013 WL

4851684, at *12 n.5.

The CFTC has requested that the Court award the

maximum civil penalty under this provision. Specifically,

they requested that the Court award $8,453,628.48, or three

times the monetary gain to DaCorta from his conduct. (Doc.

# 749 at 41). The CFTC used the criminal judgment to

estimate monetary gain, as it held that “at least

$2,817,876.16 in proceeds was obtained and dissipated by

[DaCorta] from the wire fraud and mail fraud conspiracy and

the money laundering offense, for which he was convicted.”

(Doc. # 749-12 at 9).

The Court agrees that this severe civil penalty is

justified in this case. By defrauding participants, DaCorta

violated core provisions of the Act. See Wilshire Inv.

Mgmt. Corp., 531 F.3d at 1346 (“Defrauding customers is a

violation of the core provisions of the CEA and ‘should be

considered very serious.’” (citation omitted)). He also did

so knowingly and repeatedly. (Doc. # 749-8 at 14, 16).

DaCorta has not accepted responsibility for his actions and

still denies that he violated the law. See generally (Doc.

# 750) (denying that DaCorta is liable based on any of the

counts alleged). Further, DaCorta committed these

violations while already bound by a 2010 settlement that

prohibited him “from trading in any capacity that would

require registration with the NFA.” (Doc. # 749 at ¶ 6).

Therefore, the Court determines that a strong penalty is

warranted here to both account for the severity of

DaCorta’s conduct and provide sufficient deterrence for

future violations.

V. Conclusion

The Court grants summary judgment in favor of the CFTC

on all counts. The CFTC has demonstrated that there is no

genuine dispute of material fact regarding these claims,

both as to whether DaCorta individually can be held

responsible for the violations and whether he can be held

liable for OIG and OM’s violations pursuant to Section 13b

of the Act. Because the CFTC is entitled to summary

judgment, the Court also denies DaCorta’s Motion.

Accordingly, it is now

ORDERED, ADJUDGED, and DECREED:

(1) Plaintiff Commodity Futures Trading Commission’s

Motion for Summary Judgment Against Defendant Michael

J. DaCorta (Doc. # 749) is GRANTED.

(2) Defendant Michael J. DaCorta’s Motion for Summary

Judgment on Behalf of Defendant Michael J. DaCorta

(Doc. # 750) is DENIED.

(3) The Clerk is directed to enter judgment in favor of

the CFTC and against Defendant Michael J. DaCorta on

all counts of the complaint in the amount of

$53,270,336.08 plus post-judgment interest as

restitution and $8,453,628.48 as a civil penalty.

Additionally, DaCorta is permanently enjoined from

further violations of the Commodities Exchange Act and

supporting regulations, and actions presenting

opportunities for future violations, as described in

this Order. The Clerk is directed to include the

language of the permanent injunction, as stated on

pages 37-41 of this Order in the Judgment.

(3) In light of this Order, Defendant Michael J. DaCorta’s

Petition for Writ of Habeas Corpus ad Testificandum

(Doc. ## 769, 770) is DENIED.

(4) The Clerk is directed to CLOSE the case.

DONE and ORDERED in Chambers in Tampa, Florida, this

6th day of December, 2023.

fai Ir. Munaby (noe¥

VIR! TA M. HERNANDEZ’*COVINGTON

UNITED STATES DISTRICT JUDGE

46