UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

J Squared Invest LLC and 

Jozef Gherman, 

Respondents.

) 

) 

)

) 

) 

)

)

) 

CFTC Docket No. 21-06

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

from in or about June 2017 to at least July 2018 (“Relevant Period”), J Squared Invest LLC (“J 

Squared Invest”) and Jozef Gherman (“Gherman”) (collectively, “Respondents”) violated 

Section 6(c)(1) of the Commodity Exchange Act (“Act”), 7 U.S.C. § 9(1) (2018), and Regulation 

180.1(a), 17 C.F.R. § 180.1(a) (2019) of the Commission Regulations (“Regulations”) 

promulgated thereunder. Therefore, the Commission deems it appropriate and in the public 

interest that public administrative proceedings be, and hereby are, instituted to determine 

whether Respondents engaged in the violations set forth herein and to determine whether any 

order should be issued imposing remedial sanctions. 

In anticipation of the institution of an administrative proceeding, Respondents have 

submitted an Offer of Settlement (“Offer”), which the Commission has determined to accept. 

Without admitting or denying any of the findings or conclusions herein, Respondents consent to 

the entry of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Commodity 

Exchange Act, Making Findings, and Imposing Remedial Sanctions (“Order”), and acknowledge 

service of this Order.1

1

 Respondents consent to the use of the findings of fact and conclusions of law in this Order in this proceeding and 

in any other proceeding brought by the Commission or to which the Commission is a party or claimant, and agree 

that they shall be taken as true and correct and be given preclusive effect therein, without further proof. 

Respondents do not consent, however, to the use of this Order, or the findings or conclusions herein, as the sole 

basis for any other proceeding brought by the Commission or to which the Commission is a party or claimant, other 

than: a proceeding in bankruptcy or receivership; or a proceeding to enforce the terms of this Order. Respondents 

do not consent to the use of the Offer or this Order, or the findings or conclusions in this Order, by any other party in 

any other proceeding.
2 

II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

Between June 2017 and July 2018, Respondents solicited and accepted funds from over 

forty (40) customers to trade virtual currencies (also called cryptocurrencies or digital assets), 

including Bitcoin, Bitcoin Cash, Ether and other alternative coins2 (“altcoins”), through the use 

of materially misleading statements and omissions. Respondents solicited retail customers for 

the purpose of, inter alia, purchasing sufficient quantities of virtual currencies to establish and 

operate masternodes. Respondents solicited customers through various means, including a 

website, social media and written and verbal communications, which: (i) made misleading 

representations about the growth and success of J Squared and Gherman’s success as a trader; 

and (ii) made misleading statements and omissions regarding the likelihood of profit and risk of 

loss, including by claiming that in purchasing the virtual currencies to operate the masternodes, 

the customer would make the original principal, set up fee and profit, even if the price of the 

underlying virtual currency suffered catastrophic losses. 

In total, Respondents solicited over $300,000 from over 40 individuals through the use of 

their misleading statements and omissions. Almost all of these customers who entrusted 

Respondents with their funds and followed Gherman’s recommendations lost most of their 

investments. 

* * * * * 

In accepting the Offer, the Commission recognizes the substantial cooperation of 

Respondents with the Division of Enforcement’s (“Division”) investigation of this matter. The 

Commission also acknowledges Respondents’ representations concerning their remediation in 

connection with this matter. The Commission’s recognition of Respondents’ substantial 

cooperation and remediation is further reflected in the form of a reduced penalty. 

 

B. RESPONDENTS 

Jozef Gherman, born in 1994, is a Florida resident. Gherman was an employee and one 

of the founders of J Squared and was its principal owner and CEO. Gherman has never been 

registered with the Commission in any capacity. 

J Squared Invest LLC was a limited liability company organized under the laws of the 

State of Florida in October 2017. The company was dissolved in October 2018. Gherman was 

listed as the company’s manager in corporate filings, and as its CEO on its website. The 

company’s most recent address, according to corporate filings, was listed in St. Petersburg, 

Florida. J Squared has never been registered with the Commission in any capacity. 

 

2

 Bitcoin Cash is a “forked” virtual currency derived from Bitcoin. “Forking” involves a splitting of the blockchain 

on which the virtual currency runs in a different direction. The term “altcoins” refers to virtual currencies other than 

Bitcoin. Ether is the largest altcoin by market capitalization as of September 2020. 
3 

C. FACTS 

 From at least in or around June 2017 through at least July 2018 (the “Relevant Period”), 

Respondents were engaged in the business of purchasing and selling Ether, Bitcoin, Bitcoin Cash 

along with other altcoins. Bitcoin is a form of virtual currency, which is a decentralized, peer-topeer form of electronic currency. 

 As part of their operations, Respondents solicited and received both virtual currencies 

and fiat currency, including U.S. Dollars from customers in various states and countries for the 

purpose of entering into or facilitating the customers’ purchase or sale of various virtual 

currencies for customers, including Bitcoin, Bitcoin Cash, Ether and other altcoins. Initially, 

Respondents solicited customers to purchase virtual currencies in order to speculate on the price 

of the underlying virtual currency. In or around January 2018, Respondents changed their 

business model to identify and purchase particular altcoins in sufficient quantity that would 

allow them to operate masternodes3 and earn passive income. In total, Gherman and J Squared 

solicited over $300,000 from over forty individuals (the “J Squared Customers” or “Customers”). 

 Gherman and J Squared entered into written agreements with the Customers that referred 

to J Squared as the “Advisor” to the Customers. The form of the investor agreement changed 

over time, initially identifying Gherman as a fiduciary of the Customers, and later indicating that 

J Squared was responsible for proposing a “methodology to guide current and new investments” 

for the Customers. The Customers typically had little, if any, background in virtual currencies 

and relied on Gherman to select the virtual currencies for their investments. Many Customers 

were dependent on Gherman to make their investment decisions for them and trusted him as their 

investment “advisor” to make those decisions for them. 

Gherman, in his communications with J Squared Customers, recklessly made 

misleading statements of material fact or omitted to state material facts which induced 

individuals to invest with J Squared, invest additional funds with J Squared, or continue to hold 

their investments with J Squared. Respondents made misleading statements regarding J 

Squared’s growth and success as a company, its expanding clientele, and its ability to be 

selective in acquiring customers. For instance, Respondents falsely stated that J Squared was 

“rapidly approaching multimillion dollar levels [under management].” In fact, J Squared’s 

assets under management did not approach the million-dollar mark. Financial records and 

emails indicate that, at the time of this claim, J Squared’s assets under management were 

approximately $100,000. Similarly, Respondents made false statements that the company was 

focusing on “quality over quantity” and began imposing “minimum” investment requirements 

that exceeded most current Customers’ investment levels. In reality, J Squared continued to 

accept new Customers investing at levels far below the $10,000 “minimum” investment level. 

Most Customers invested between $2,000 and $7,000 with J Squared. 

 

3

 A masternode is essentially computer wallet (also known as a crypto full node) that supports the network of a 

virtual currency by hosting an entire copy of the coin’s ledger in real time. In return for its hosting services, the 

owner of masternode will receive virtual currencies as a reward. See https://cryptodigestnews.com/blockchainbasics-what-is-masternode-dbed481a846e?gi=6455a2eaeb19. To establish a masternode, a party needs to purchase 

a substantial quantity of the virtual currency in question to serve as the operator’s “stake” in the currency. 

https://decryptionary.com/dictionary/masternode/. 
4 

 Furthermore, Respondents recklessly made materially false and misleading statements 

and omissions regarding the likelihood of profit and the risk of loss. For instance, when 

Gherman initially proposed liquidating the virtual currencies to accumulate altcoins to run 

masternodes, he explained it by saying “[t]he reason is simple. You are going to receive a check 

at the end every month,” and that customers have the opportunity “to generate substantial income 

at a fraction of the cost ...[and] can get a $5,000 master node that can generate $40,000 

annually.” However, when touting the likelihood of profit for his investment recommendation, 

Gherman failed to disclose that the returns or rewards generated by masternodes tended to be 

“random” and could not be relied upon to generate enough rewards to warrant monthly checks or 

thousands of dollars annually. Gherman subsequently acknowledged to customers that 

masternode returns tended to be random only after Customers made their initial investment and 

then complained about the failure to produce the touted returns. Gherman also misrepresented 

the risk of loss in purchasing certain virtual currencies, claiming, for example, that “[i]n every 

scenario, especially the catastrophic scenario, the client [still] makes original principal, set up fee 

and profit.” While Gherman provided boilerplate disclosures in emails that his claims were not 

“guarantees,” he was reckless in misrepresenting to Customers the likelihood of profit and the 

risk of loss associated with their investments. 

 In almost every instance, the masternodes Gherman recommended failed to deliver the 

touted returns, and the virtual currencies purchased to run the masternodes suffered substantial 

declines in value. In total, Respondents solicited over $300,000 from over forty (40) J Squared 

Customers during the Relevant Period. Respondents incurred near total net losses on the 

investments. Collectively, the Customers suffered unreimbursed losses totaling approximately 

$247,110. 

III. LEGAL DISCUSSION 

A. Violation of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) and Regulation 180.1(a), 17 

C.F.R. § 180.1(a) 

Section 6(c)(1) of the Act makes it unlawful for any person, directly or indirectly, to: 

use or employ, or attempt to use or employ, in connection with any swap, or a 

contract of sale of any commodity in interstate commerce, or for future delivery 

on or subject to the rules of any registered entity, any manipulative or deceptive 

device or contrivance, in contravention of such rules and regulations as the 

Commission shall promulgate ... 

Promulgated under Section 6(c)(1) of the Act, Regulation 180.1(a) provides: 

It shall be unlawful for any person, directly or indirectly, in connection with any swap, or 

a contract of sale of any commodity in interstate commerce, or for future delivery on or 

subject to the rules of any registered entity, to intentionally or recklessly: 

(1) Use or employ, or attempt to use or employ, any manipulative device, scheme, or 

artifice to defraud; 
5 

(2) Make, or attempt to make, any untrue or misleading statement of a material fact or 

to omit to state a material fact necessary in order to make the statements made not 

untrue or misleading; 

(3) Engage, or attempt to engage, in any act, practice, or course of business, which 

operates or would operate as a fraud or deceit on any person. 

Virtual currencies such as Bitcoin are encompassed in the definition of “commodity” 

under Section 1a(9) of the Act, 7 U.S.C. § 1a(9) (2018). See CFTC v. McDonnell, 287 F. Supp. 

3d 213, 228 (E.D.N.Y.) (“[V]irtual currencies can be regulated by CFTC as a commodity.”), 

aff’d on reconsideration, 321 F. Supp. 3d 366 (E.D.N.Y. 2018); In re BFXNA Inc., CFTC No. 

16-19, 2016 WL 3137612, at *5 (June 2, 2016) (consent order) (“[V]irtual currencies are 

encompassed in the [Act’s] definition and properly defined as commodities.”); In re Coinflip, 

Inc., CFTC No. 15-29, 2015 WL 5535736, at *2 (Sept. 17, 2015) (consent order) (“Bitcoin and 

other virtual currencies are encompassed in the definition [of Section 1a(9) of the Act] and 

properly defined as commodities.”); see also CFTC v. My Big Coin Pay, Inc., No. CV 18-

10077-RWZ, 2018 WL 4621727, at *5 (D. Mass. Sept. 26, 2018). Accordingly, Bitcoin, 

Litecoin and other virtual currencies are subject to applicable provisions of the Act and 

Commission Regulations, including Section 6(c)(1) of the Act and Regulation 180.1(a). See, 

e.g., In re TeraExchange LLC, CFTC No. 15-33, 2015 WL 5658082, at *3 n.3 (Sept. 24, 2015) 

(consent order) (“Further, bitcoin is a commodity under Section 1a of the Act, 7 U.S.C. § 1a 

(2012), and is therefore subject as a commodity to applicable provisions of the Act and 

Regulations.”). 

The Commission has authority under Section 6(c)(1) of the Act and Regulation 180.1 to 

take action against persons who engage in fraud and fraudulent schemes in connection with 

contracts of sale of commodities in interstate commerce. McDonnell, 321 F. Supp. 3d at 367 

(affirming on reconsideration that “Title 7 U.S.C. § 9(1) gives the CFTC standing to exercise 

its enforcement power over the fraudulent schemes alleged in the complaint.”); My Big Coin 

Pay, 2018 WL 4621727 at *5 (rejecting defense that Section 6(c)(1) of the Act and Regulation 

180.1 were meant only to combat fraudulent market manipulation and not the alleged 

solicitation fraud). A person violates Section 6(c)(1) of the Act and Regulation 180.1 if he or 

she: (1) engages in prohibited conduct (i.e., employs a fraudulent scheme, makes material 

misrepresentations or omissions, or engages in fraudulent business practices); (2) in connection 

with the sale of a commodity in interstate commerce; (3) with scienter. CFTC v. Hunter Wise 

Commodities, LLC, 21 F. Supp. 3d 1317, 1347 (S.D. Fla. 2014). Each of these elements is 

present in this case. 

During the course of J Squared’s operations, Gherman solicited and received virtual 

currency and fiat currency, including U.S. Dollars from Customers in various states and 

countries for the purpose of entering into or facilitating the Customers’ purchase or sale of 

cryptocurrency. Gherman engaged in prohibited conduct when he made misleading statements 

to Customers regarding J Squared’s growth and success as a company, its expanding clientele, 

including misleading statements that J Squared was “rapidly approaching multimillion dollar 

levels [under management].” 

Similarly, Gherman made misrepresentations to Customers regarding the likelihood of 

profit of his investment recommendations and the risk of loss. For example, Gherman 
6 

recklessly made false statements asserting that Customers who purchased altcoins for the 

creation of masternodes were “going to receive a check at the end every month,” and that they 

could “get a $5,000 master node that can generate $40,000 annually.” Gherman failed to 

disclose to Customers that he understood the touted returns or rewards generated by 

masternodes tended to be “random.” 

 A statement of fact is material if “there is a substantial likelihood that a reasonable 

investor would consider it important in making an investment decision.” Saxe v. E.F. Hutton & 

Co., 789 F.2d 105, 111 (2d Cir. 1986). Any fact that enables investors to assess the risk 

inherent in their investment and the likelihood of profit is material. See In re Commodities Int’l 

Corp., CFTC No. 83-43, 1997 WL 11543, at *8-9 (Jan. 14, 1997). Misrepresentations 

concerning profit and risk go to the heart of a customer’s investment decision and are therefore 

material as a matter of law. CFTC v. Int’l Fin. Servs. (N.Y.), Inc., 323 F. Supp. 2d 482, 501 

(S.D.N.Y. 2004) (citations omitted). Here, Respondents’ misrepresentations about the growth, 

success, and expanding clientele of J Squared, as well as Respondents’ misrepresentations 

regarding likelihood of profit and risk of loss were material. 

By and through the aforementioned conduct, Respondents violated Section 6(c)(1) of 

the Act and Regulation 180.1 when they either knowingly or recklessly made false and 

misleading statements and omissions in connection with contracts of sale of virtual currencies 

in interstate commerce such as Ether, Bitcoin, Bitcoin Cash and other altcoins. 

B. Gherman Is Liable as a Control Person for J Squared’s Conduct. 

Gherman is liable for J Squared’s conduct as a controlling person. Section 13(b) of the 

Act, 7 U.S.C. § 13c(b) (2018), states that a controlling person of an entity is liable for the 

violations of that entity if the controlling person knowingly induced the violations, directly or 

indirectly, or did not act in good faith. “A fundamental purpose of Section 13[(b)] is to allow the 

Commission to reach behind the corporate entity to the controlling individuals of the corporation 

and to impose liability for violations of the Act directly on such individuals as well as the 

corporation itself.” CFTC v. R.J. Fitzgerald & Co., Inc., 310 F.3d 1321, 1334 (11th Cir. 2002) 

(quoting JCC, Inc. v. CFTC, 63 F.3d 1557, 1567 (11th Cir. 1995)). A controlling person 

“knowingly induced” the conduct if he “had actual or constructive knowledge of the core 

activities that make up the violation at issue and allowed them to continue.” Id.

To establish the control element, Plaintiff must prove by a preponderance of the evidence 

that the alleged control person had “general control over the operation of the entity principally 

liable.” Monieson v. CFTC, 996 F.2d 852, 859 (7th Cir. 1993) (quoting Donohoe v. Consol. 

Operating & Prod. Corp., 982 F.2d 1130, 1138 (7th Cir. 1992)). Control person liability will 

attach if the defendant “possessed the power or ability to control the specific transaction or 

activity upon which the primary violation was predicated.” Id. Making management and hiring 

decisions and overseeing day-to-day operations support a finding that the alleged 

controlling person exercised “general control” over the enterprise. See id. at 860 (citing G.A. 

Thompson & Co., Inc. v. Partridge, 636 F.2d 945, 958 (5th Cir. 1981)). It is the existence of the 

“power” or ability to control the illegal transaction or activity “that matters, not whether he 

exercised it by actually participating in or benefitting from the illegal acts.” See id. 
7 

Gherman was one of founders and chief operating officer of J Squared. Gherman 

had actual knowledge of the violations at issue here. Gherman exercised general control over J 

Squared by making management and personnel decisions for the company, was the main point of 

contact for soliciting and interacting with J Squared Customers, and conducted the trading 

activities for the company and its Customers. Therefore, pursuant to Section 13(b) of the Act, 

Gherman as a controlling person is liable for J Squared’s violations of Section 6(c)(1) and 

Regulation 180.1. 

C. J Squared Is Liable for Gherman’s Conduct 

J Squared is liable for Gherman’s conduct. Section 2(a)(1)(B) of the Act, 7 U.S.C. 

§ 2(a)(1)(B) (2018), and Regulation 1.2, 17 C.F.R. § 1.2 (2019), provide that “[t]he act, 

omission, or failure of any official, agent, or other person acting for any individual, association, 

partnership, corporation, or trust within the scope of his employment or office shall be deemed 

the act, omission, or failure of such individual, association, partnership, corporation, or trust.” 

Pursuant to Section 2(a)(1)(B) of the Act and Commission Regulation 1.2, strict liability is 

imposed on principals for the actions of their agents. See, e.g., Rosenthal & Co. v. CFTC, 802 

F.2d 963, 966 (7th Cir. 1986); Dohmen-Ramirez v. CFTC, 837 F.2d 847, 857-58 (9th Cir. 1988); 

CFTC v. Byrnes, 58 F. Supp. 3d 319, 324 (S.D.N.Y. 2014). 

Gherman, an employee, official and agent of J Squared, engaged in the conduct described 

herein within the course and scope of his employment or office with J Squared. Therefore, 

pursuant to Section 2(a)(1)(B) of the Act and Regulation 1.2, J Squared is liable for the acts, 

omissions, and failures of Gherman in violation of the provisions of the Act and Regulations 

cited above. 

IV. FINDINGS OF VIOLATION 

Based on the foregoing, the Commission finds that, during the Relevant Period, 

Respondents violated Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2018), and Regulation 

180.1(a), 17 C.F.R. § 180.1(a) (2019). 

V. OFFER OF SETTLEMENT 

Respondents have submitted the Offer in which they, without admitting or denying the 

findings and conclusions herein: 

A. Acknowledge service of this Order; 

B. Admit the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waive: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 
8 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that they may possess under the Equal Access to Justice Act, 5 

U.S.C. § 504 (2018), and 28 U.S.C. § 2412 (2018), and/or the rules promulgated 

by the Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. 

pt. 148 (2019), relating to, or arising from, this proceeding; 

7. Any and all claims that they may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201–253, 110 

Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 

D. Stipulate that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondents have consented in the Offer; and 

E. Consent, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Respondents violated Section 6(c)(1) of 

the Act, 7 U.S.C. § 9(1) (2018), and Regulation 180.1(a), 17 C.F.R. § 180.1(a) 

(2019); 

2. Orders Respondents to cease and desist from violating Section 6(c)(1) of the Act 

and Regulation 180.1(a); 

3. Orders Respondents to pay restitution in the amount of two hundred-forty seven 

thousand one hundred and ten dollars ($247,110), plus post-judgment interest 

within thirty days of the date of entry of this Order, with the amount to be paid by 

Gherman to be capped at one hundred and twenty-three thousand five hundred and 

fifty-five dollars ($123,555), plus any post-judgment interest, and the amount to be 

paid by J Squared to be capped at one hundred and twenty-three thousand five 

hundred and fifty-five dollars ($123,555), plus any post-judgment interest; 

4. Orders Respondents to pay a civil monetary penalty in the amount of one hundred 

and fifty thousand dollars ($150,000), plus post-judgment interest within thirty 

days of the date of entry of this Order, with the amount to be paid by Gherman to 

be capped at seventy-five thousand dollars ($75,000), plus any post-judgment 

interest, and the amount to be paid by J Squared to be capped at seventy-five 

thousand dollars ($75,000), plus any post-judgment interest; 
9 

5. Appoints the National Futures Association (“NFA”) as Monitor in this matter; 

6. Orders that Respondents be prohibited from, directly or indirectly, engaging in 

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) (2018)), for a period of ten (10) years 

after the date of entry of this Order, and all registered entities shall refuse them 

trading privileges during that period; and 

7. Orders Respondents and their successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order.

Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

1. Respondents shall cease and desist from violating Section 6(c)(1) of the Act, 7 U.S.C. 

§9(1) (2018), and Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2019). 

2. Respondents shall pay restitution in the amount of two hundred-forty seven thousand one 

hundred and ten dollars ($247,110), plus post-judgment interest within thirty days of the 

date of entry of this Order, with the amount to be paid by Gherman to be capped at one 

hundred and twenty-three thousand five hundred and fifty-five dollars ($123,555), plus 

any post-judgment interest, and the amount to be paid by J Squared to be capped at one 

hundred and twenty-three thousand five hundred and fifty-five dollars ($123,555), plus 

any post-judgment interest (“Restitution Obligations”). If the Restitution Obligations are 

not paid in full within thirty days of the date of entry of this Order, then post-judgment 

interest shall accrue on the Restitution Obligations beginning on the date of entry of this 

Order and shall be determined by using the Treasury Bill rate prevailing on the date of 

entry of this Order pursuant to 28 U.S.C. § 1961 (2018). 

To effect payment by Respondents and the distribution of restitution to Respondents’ 

customers, the Commission appoints NFA as “Monitor.” The Monitor shall receive 

payments of the Restitution Obligations and any post-judgment interest from 

Respondents and make distributions as set forth below. Because the Monitor is not being 

specially compensated for these services, and these services are outside the normal duties 

of the Monitor, it shall not be liable for any action or inaction arising from its 

appointment as Monitor other than actions involving fraud. 

Respondents shall make their respective payments of the Restitution Obligations and any 

post-judgment interest under this Order in the name of the “J Squared/Jozef Gherman 

Settlement Fund” and shall send such payments by electronic funds transfer, or U.S. 

postal money order, certified check, bank cashier’s check, or bank money order to the 

Office of Administration, National Futures Association, 300 South Riverside Plaza, Suite 

1800, Chicago, Illinois 60606, under a cover letter that identifies the paying Respondent 

and the name and docket number of this proceeding. The paying Respondent shall 

simultaneously transmit copies of the cover letter and the form of payment to the Chief 
10 

Financial Officer, Commodity Futures Trading Commission, Three Lafayette Centre, 

1155 21st Street, NW, Washington, D.C. 20581. 

The Monitor shall oversee Respondents’ Restitution Obligations and shall have the 

discretion to determine the manner of distribution of funds in an equitable fashion to the 

Respondents’ customers or may defer distribution until such time as the Monitor may 

deem appropriate. In the event that the amount of payments of the Restitution Obligations 

to the Monitor are of a de minimis nature such that the Monitor determines that the 

administrative cost of making a restitution distribution is impractical, the Monitor may, in 

its discretion, treat such restitution payments as civil monetary penalty payments, which 

the Monitor shall forward to the Commission, as discussed below. To the extent any 

funds accrue to the U.S. Treasury for satisfaction of Respondents’ Restitution 

Obligations, such funds shall be transferred to the Monitor for disbursement in 

accordance with the procedures set forth in this Order. 

3. Respondents shall pay a civil monetary penalty in the amount of one hundred fifty 

thousand dollars ($150,000), plus post-judgment interest within thirty days of the date of 

entry of this Order; with the amount to be paid by Gherman to be capped at seventy-five 

thousand dollars ($75,000), plus any post-judgment interest, and the amount to be paid by 

J Squared to be capped at seventy-five thousand dollars ($75,000), plus any postjudgment interest (“CMP Obligations”). If the CMP Obligations are not paid in full 

within thirty days of the date of entry of this Order, then post-judgment interest shall 

accrue on the CMP Obligations beginning on the date of entry of this Order and shall be 

determined by using the Treasury Bill rate prevailing on the date of entry of this Order 

pursuant to 28 U.S.C. § 1961 (2018). 

J Squared and Gherman shall pay their respective CMP Obligations and any postjudgment interest by electronic funds transfer, U.S. postal money order, certified check, 

bank cashier’s check, or bank money order. If payment is to be made other than by 

electronic funds transfer, then the payment shall be made payable to the Commodity 

Futures Trading Commission and sent to the address below:

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

HQ Room 181 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 fax 

9-AMC-AR-CFTC@faa.gov 

 If payment is to be made by electronic funds transfer, Respondents shall contact Marie 

Thorne or her successor at the above address to receive payment instructions and shall 

fully comply with those instructions. Respondents shall accompany payment of the CMP 

Obligations with a cover letter that identifies the paying Respondent and the name and 

docket number of this proceeding. The paying Respondent shall simultaneously transmit 
11 

copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

4. Respondents are prohibited from, directly or indirectly, engaging in 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) (2018)), for a period of ten (10) years after the date of entry of this 

Order, and all registered entities shall refuse them trading privileges during that period; 

and 

5. Respondents and their successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Public Statements: Respondents agree that neither they nor any of their 

successors and assigns, agents or employees under their authority or control shall 

take any action or make any public statement denying, directly or indirectly, any 

findings or conclusions in this Order or creating, or tending to create, the 

impression that this Order is without a factual basis; provided, however, that 

nothing in this provision shall affect Respondents’: (i) testimonial obligations; or 

(ii) right to take legal positions in other proceedings to which the Commission is 

not a party. Respondents and their successors and assigns shall comply with this 

agreement, and shall undertake all steps necessary to ensure that all of their agents 

and/or employees under their authority or control understand and comply with 

this agreement. 

2. Respondents agree that, for a period of ten (10) years, they shall not, directly or 

indirectly: 

a. enter into any transactions involving “commodity interests” (as that term is 

defined in Regulation 1.3, 17 C.F.R. § 1.3 (2019), or virtual currencies, for 

Respondents’ own personal accounts or for any accounts in which 

Respondents have a direct or indirect interest; 

b. have any commodity interests traded, or virtual currency transactions 

conducted, on Respondents’ behalf; 

c. control or direct 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 or virtual currencies; 

d. solicit, receive, or accept any funds from any person for the purpose of 

purchasing or selling any commodity interests or virtual currencies; 

e. apply for registration or claim exemption from registration with the 

Commission in any capacity, and engage in any activity requiring such 

registration or exemption from registration with the Commission except as 

provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2019); and/or 
f. act as a principal (as that term is defined in Regulation 3. l(a), 17 C.F.R. 

§ 3.l(a) (2019)), agent or any other officer or employee of any person (as that 

term is defined in Section la(38) of the Act, 7 U.S.C. § la(38) (2018)), 

registered, required to be registered, or exempted from registration with the 

Commission except as provided for in Regulation 4.14(a)(9). 

3. Cooperation with Monitor: Respondents shall cooperate with the Monitor as 

appropriate to provide such information as the Monitor deems necessary and 

appropriate to identify Respondents' customers, whom the Monitor, in its sole 

discretion, may determine to include in any plan for distribution of any restitution 

payments. Respondents shall execute any documents necessary to release funds 

that they have in any repository, bank, investment or other financial institution, 

wherever located, in order to make partial or total payment toward the Restitution 

Obligations. 

4. Cooperation, in General: Respondents shall cooperate fully and expeditiously 

with the Commission, including the Commission's Division of Enforcement in 

this action. 

5. Partial Satisfaction: Respondents understand and agree that any acceptance by 

the Commission or the Monitor of any partial payment of Respondents' 

Restitution Obligations or CMP Obligations shall not be deemed a waiver of their 

obligation to make further payments pursuant to this Order, or a waiver of the 

Commission's right to seek to compel payment of any remaining balance. 

6. Change of Address/Phone: Until such time as Respondents satisfy in full their 

Restitution Obligations and CMP Obligations as set forth in this Order, 

Respondents shall provide written notice to the Commission by certified mail of 

any change to their telephone number and mailing address within ten calendar 

days of the change. 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

Christopher J. Kirkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: April 19, 2021 

12