Case 1:22-cv-00635-LY Document 27 Filed 04/24/23 Page 1 of 39

Fl LED 

APR 2 4 2023 

UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF TEXAS 

CLERK. U.S. DI 

WESTERN DIST 

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

v. 

MIRROR TRADING INTERNATIONAL 

PROPRIETARY LIMITED, and 

CORNELIUSJOHANNESSTEYNBERG 

Defendants. 

BY ___ ----\--,1--V-,~= 

Case No. 1:22-cv-635-LY 

ORDER FOR FINAL JUDGMENT BY DEFAULT, PERMANENT 

INJUNCTION, RESTITUTION, CIVIL MONET ARY PENAL TY, AND OTHER 

EQUITABLE RELIEF AGAINST DEFENDANT CORNELIUS STEYNBERG 

Before the Court is Plaintiff Commodity Futures Trading Commission's ("Plaintiff' or 

"CFTC") Motion for Entry of Default Judgment, Permanent Injunction, Restitution, Civil 

Monetary Penalty, and other Equitable Relief against Defendant Cornelius Johannes Steynberg 

("Defendant" or "Steynberg"), pursuant to Fed. R. Civ. P. 55(b)(2). For the reasons stated below 

and good cause having been shown, the Motion is GRANTED. 

I. BACKGROUND 

1. On June 30, 2022, Plaintiff filed a Complaint charging Defendants Steynberg and 

Mirror Trading International Proprietary Limited ("MTI") with violating anti-fraud and 

registration provisions of the Commodity Exchange Act (the "Act"), 7 U.S.C. 

§§ 2(c)(2)(C)(iii)(I)(cc), 6b(a)(2)(A)-(C), 6k(2), 6m(l), 6o(l)(A)-(B), and 17 C.F.R. 

§§ 4.20(a)(l), (b), (c), 5.2(b)(l)-(3), 5.3(a)(2)(i), (ii) (2022). 

2. On October 11, 2022, the CFTC served Steynberg with the Complaint and 

Summons by publication as authorized by the Court. Proof of Service, ECF No. 12. 

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3. Steynberg's period to answer or move against the Complaint expired on 

November 15, 2022. 1 

4. Steynberg failed to respond to the Complaint within the time allowed, prompting 

the CFTC to submit a Motion for Entry of Default Against Steynberg pursuant to Fed. R. Civ. P. 

55(a). Mot. for Clerk's Entry of Default Against Defendant Steynberg, ECF No. 14. 

5. On November 18, 2022, the Clerk entered default against Steynberg. Clerk's 

Entry of Default Against Steynberg, ECF No. 15. 

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW 

A. Findings of Fact 

The Parties 

6. Plaintiff Commodity Futures Trading Commission is an independent federal 

regulatory agency charged by Congress with the administration and enforcement of the Act and 

the Regulations promulgated thereunder. 

7. Defendant Cornelius Johannes Steynberg is a citizen of the Republic of South 

Africa. Steynberg's last known residence is in Stellenbosch, Western Cape South Africa. Upon 

information and belief, he is a fugitive from South African law enforcement but was detained in 

the Federative Republic of Brazil on an INTERPOL arrest warrant in or about late-December 

2021. Throughout the Relevant Period, Steynberg held himself out as the Shareholder, Director, 

and CEO ofMTI. Steynberg has never been registered with the CFTC in any capacity. 

8. Defendant Mirror Trading International Proprietary Limited is a company 

organized and operated pursuant to the laws of the Republic of South Africa, with a principal 

1 Although Fed. R. Civ. P. 12(a)(l)(A)(i) requires a defendant to answer or move against a 

complaint within 21 days of service, the Court permitted additional time for Defendant 

Steynberg to answer following service by publication. 

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place of business in Stellenbosch, Western Cape South Africa. MTI has never been registered 

with the CFTC in any capacity. 

Factual Overview 

9. From at least May 18, 2018 through at least March 30, 2021 (the "Relevant 

Period"), Steynberg, individually and as the controlling person of MTI, engaged in an 

international fraudulent multilevel marketing ("MLM") scheme, using the websites 

www.mtimembers.com, www.mirrortradinginternational.au.za, and www.mymticlub.com, in 

addition to social media, to solicit Bitcoin from members of the public for participation in a 

commodity pool operated by MTI ("commodity pool" or "Pool"). Compl. 1 1; Deel. of Futures 

Trading Investigator George H. Malas ("Malas Deel. III") 118, 15. The Pool purportedly traded 

off-exchange, retail foreign currency ("forex") on a leveraged, margined and/or financed basis 

with participants who were not eligible contract participants ("ECPs") through a proprietary 

"bot" or software program. Compl. 1 1; Malas Deel. III 1 8. During the Relevant Period, 

Steynberg, individually and as the principal and agent of MTI, accepted at least 29,421 Bitcoin 

-with a value of not less than $1,733,838,372 at the end of the Relevant Period- from at least 

23,000 U.S. participants (over 1,300 from Texas), and even more throughout the world, without 

being registered as an associated person ("AP") of a commodity pool as required by federal law. 

Compl. 111, 7, 16, 22; Malas Deel. III 117b, 8; Malas Deel. III Ex. 1 at MTI-NFA-7-1 to 7-2, 8-

1 to 8-2 (NFA Certs.). At the same time, MTI operated as a commodity pool operator ("CPO") 

without being registered as such as required by federal law. Compl. 11 1, 7, 17; Malas Deel. III 

17a; Malas Deel. III Ex. 1 at NFA-5-1 to 5-2, 6-1 to 6-2 (NFA Certs.). Defendants 

misappropriated, either directly or indirectly, all of the Bitcoin they accepted from pool 

participants. Compl. 11 1, 4, 6, 39-43; Malas Deel. III 118, 23, 25. 

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10. In early 2021, MTI was the subject of bankruptcy proceedings in the Republic of 

South Africa. Compl. 15; Malas Deel. III 111. By April 2021, the South African Financial 

Services Conduct Authority ("FSCA") was working with South African bankruptcy liquidators 

as MTI had been placed into liquidation.2 Compl. 1 5; Malas Deel. III 1 11. Shortly thereafter, it 

was learned that FXChoice, Ltd. ("FXChoice"), a broker located in Belize, had frozen 

Defendants' Pool account (account No.**4850, referred to hereinafter as "FXChoice Pool 

account" or "Pool account"), eight months earlier, on or about August 7, 2020, for suspected 

fraud. Compl. 11 5, 32-38; Malas Deel. III 11 11, 39; Malas Deel. III Ex. 3 at MTI-FSCA-36-2, 

50-1, 56-3, 71-4, 89-21 (FSCA Docs.). At the time FXChoice froze the Pool account in August 

2020, it held only 1,280 Bitcoin, with a value of approximately $7 5.4 million at the end of the 

Relevant Period. Compl. 1 5; Malas Deel. III 11 11, 39, 41d; Malas Deel. III Ex. 3 at MTIFSCA-36-1, 49-3, 50-1, 89-18 (FSCA Docs.). Of the 29,421 Bitcoin participants sent to 

Defendants' electronic wallets ("E-Wallets") for the MTI pool, Defendants deposited only 1,847 

into the Pool account. Compl. 114, 6, 40; Malas Deel. III 1112, 24, 41c; Malas Deel. III Ex. 3 at 

MTI-FSCA-36-1, 46-3, 49-3, 89-18 (FSCA Docs.). Therefore, Defendants failed to deposit 

27,574 Bitcoin from participants into the FXChoice Pool account. Compl. 116, 40; Malas Deel. 

III 11 12, 14, 24. Defendants' limited trading in the FXChoice Pool account resulted in overall 

losses, and Defendants misappropriated the remaining 27,574 Bitcoin sent by participants for 

trading, including by failing to use all of the funds for trading and by providing Bitcoin to certain 

participants as sham "profits" and "bonus" payments in the nature of a "Ponzi" scheme. Compl. 

116, 39-43; Malas Deel. III 1114, 23; Malas Deel. III Ex. 3 at MTI-FSCA-13-3, 36-2, 71-4, 89-

2 MTI's joint liquidators filed for bankruptcy in the U.S. District Court for the Southern District 

of Florida under Chapter 15 of the U.S. Bankruptcy Code. See In re Mirror Trading Int'! (PTY) 

Ltd., No. 23-11046-PDR (S.D. Fla. filed Feb. 9, 2023). 

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3 to 89-4, 89-18, 89-35 (FSCA Docs.). Upon information and belief, Steynberg fled South 

Africa and was subsequently arrested in the Federative Republic of Brazil for using a false 

identity and then held on an INTERPOL warrant, where he is currently being detained and 

awaiting extradition proceedings. Compl. 1 16; Malas Deel. III 1 7b. 

The Fraudulent Scheme 

1. The Initial Scheme 

11. Steynberg founded MTI in the Republic of South Africa in April 2019. Com pl. 

1 21; Malas Deel. III 1 7b. Throughout the Relevant Period, Defendants, by and through 

Steynberg, accepted at least 29,421 Bitcoin with a value of not less than $1,733,838,372 at the 

end of the Relevant Period from at least 23,000 U.S. participants and others throughout the world 

to participate in the unregistered commodity pool. Comp 1. 1 21; Malas Deel. III 11 8, 10, 12. 

Most if not all of these participants were non-ECPs based upon information and belief. Compl. 

1 21; Malas Deel. III 1 16. Defendants, through Steynberg, knowingly and falsely represented to 

actual and prospective pool participants that Defendants operated a pooled forex account, using 

an experienced trader to produce consistent, high rates of return. Comp 1. 1 21; Malas Deel. III 

1113, 29, 32; Malas Deel. III Ex. 3 at MTI-FSCA-89-3, 89-15 (FSCA Docs.), Ex. 5 at MTICFTC-WEB-5-1 (MTI Website). 

12. Throughout the Relevant Period, Defendants solicited actual and prospective 

participants through social media such as Facebook, Instagram, and YouTube. Compl. 122; 

Malas Deel. III 1 15; Malas Deel. III Exs. 5, 7 (MTI Website; MTI Social Media). Defendants 

also solicited through in-person meetings, word-of-mouth, instant messaging services such as 

Telegram Messaging App, podcasts, and websites operated by Steynberg, including 

www.mirrortradinginternational.au.za, www.mtimembers.com, www.mymticlub.com, and 

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www.mymticlub.com (collectively, the "websites"). Compl., 22; Malas Deel. III,, 15-21; 

Malas Deel. III Exs. 5, 7 (MTI Website; MTI Social Media). Defendants accepted Bitcoin from 

at least 23,000 U.S. participants, including 1,341 known participants located in the State of 

Texas. Compl., 22; Malas Deel. III,, 8-9. Defendants also relied heavily upon MLM 

marketers to tout MTI and paid both participation and referral bonuses to MLM touters from 

non-existent "profits." Compl., 22; Malas Deel. III,, 9, 14, 15; Malas Deel. III Ex. 2 at MTITSSB-68-3 (TSSB Docs.), Ex. 5 at MTI-CFTC-WEB-3-10 (MTI Website). 

2. Defendants' Solicitations to Participants 

13. Steynberg, individually and as the agent ofMTI, made claims in social media and 

on MIi's websites to actual and prospective participants that "the objective of Mirror Trading 

International is to grow your Bitcoin." Compl., 23; Malas Deel. III,, 16, 21a; Malas Deel. III 

Ex. 5 at MTI-CFTC-WEB-3-6 (MTI Website). Steynberg, individually and as the agent ofMTI, 

represented that MTI used "Bitcoin as its base currency" and "advanced digital software and 

artificial intelligence (AI) to trade on the international Forex markets," and that MIi's "[d]aily 

profits are divided in a sustainable manner and are added to member accounts." Compl. , 23; 

Malas Deel. III,, 16, 21b; Malas Deel. III Ex. 5 at MTI-CFTC-WEB-5-1 (MTI Website). 

14. Defendants targeted their solicitations to non-ECPs with limited trading 

experience, claiming participants could earn "passive income" by funding their investment with 

"as little as $100" and "no trading experience required." Compl., 24; Malas Deel. III,, 16, 

21b-21c; Malas Deel. III Ex. 5 at MTI-CFTC-WEB-5-1, 5-3 (MTI Website). The minimum 

participation amount was $100, or a fraction of a Bitcoin. Comp 1. , 24; Malas Deel. III,, 16, 

21b; Malas Deel. III Ex. 5 at MTI-CFTC-WEB-5-1 (MTI Website). 

15. Steynberg, individually and as the agent of MTI, represented through social media 

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and MTI's websites that. there were "no membership fees, no subscriptions, no packages, no 

costs & no deductions." Comp 1. 1 25; Malas Deel. III 1 21 j; Malas Deel. III Ex. 5 at MTICFTC-WEB-3-4 (MTI Website). Steynberg claimed MTI's trading "bot" achieved "profits" of 

10% per month, and that the MTI Pool had never had a losing trading day except for one day. 

Compl. 125; Malas Deel. III 11 13, 36; Malas Deel. III Ex. 3 at MTI-FSCA-89-17 to 89-18 

(FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-3-21, 3-84, 5-4 (MTI Website). Steynberg 

represented via MTI's websites that MTI's "system is automated and does everything for you," 

and participants "will receive a statement detailing the income from the trades for the day." 

Compl. 125; Malas Deel. III 1116, 21b, 211; Malas Deel. III Ex. 5 at MTI-CFTC-WEB-3-1, 5-1 

to 5-3 (MTI Website). 

16. Defendants provided each pool participant access to what Defendants referred to 

as a "back office," which was an online statement each participant could access using their login 

credentials to view how much profit their Bitcoin investment purportedly earned in the Pool 

account. Compl. 126; Malas Deel. III 1211; Malas Deel. III Ex. 7 at MTI-CFTC-WEB-75_1-4 

(MTI Social Media). Defendants advised participants that: "Your daily trade profits are 

automatically compounded in the trading pool." Compl. 126; Malas Deel. III 121m; Malas 

Deel. III Ex. 7 at MTI-CFTC-WEB-75_1-4 (MTI Social Media). Steynberg also represented to 

participants that they could withdraw their funds, in full or in part, at any time, and that 

participants' Bitcoin would be sent to their Bitcoin wallet within 48 hours of a withdrawal 

request. Compl. 126; Malas Deel. III 121k; Malas Deel. III Ex. 7 at MTI-CFTC-WEB-75_1-4 

(MTI Social Media). 

17. Steynberg testified under oath before the FSCA on July 20, 2020, that at the time 

of MTI's formation in April 2019, MTI purportedly entered into a profit-sharing agreement with 

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a trader named "Quintin," who was to conduct all trading on behalf of all members. Compl. 

,r 29; Malas Deel. III ,r,r 29-30; Malas Deel. III Ex. 3 at MTI-FSCA-31-30 to 31-31; 89-15 

(FSCA Docs.). Steynberg testified that "Quintin" purportedly used an FXChoice multi-account 

manager ("MAM" account) "linked" to each participant's individual account to control the 

trading in all participants' accounts. Steynberg opened and controlled the MAM account in 

MTI's name at FXChoice. Compl. ,r 29; Malas Deel. III ,r,r 29-30; Malas Deel. III Ex. 3 at MTIFSCA-50-1 (FSCA Docs.). 

18. Steynberg testified under oath before the FSCA that from April 2019 to July 

2019, participants initially had their own accounts that were "linked" to the MetaTrader 4 

("MT4") electronic trading platform, and MT4 traded the accounts automatically. Compl. ,r 30; 

Malas Deel. III ,r 29; Malas Deel. III Ex. 3 at MTI-FSCA-89-3, 89-15 (FSCA Docs.). Upon 

information and belief, at least 361 MTI participants held accounts in their personal name at 

FXChoice, in which forex trading took place during the period April 2019 through July 2019. 

Malas Deel. III ,r,r 31a, 3 lc; id. Ex. 4 at MTI-BFSC-532, MTI-BFSC-52 to 56 (Belize 

International Financial Services Commission Docs). Steynberg testified that in July 2019, due to 

heavy trading losses, all participants had their purported individual accounts closed and all 

Bitcoin transferred to a single pooled account controlled by Defendants. Compl. ,r 30; Malas 

Deel. III ,r 30; Malas Deel. III Ex. 3 at MTI-FSCA-78-2 to 78-3, 89-3, 89-15 (FSCA Docs.). 

Specifically, Steynberg testified: 

No our members do not have access to Meta Trader, when we just started in April 

last. I had it set up that every single member had his own account with the 

Brokerage themselves on a mam account. And then we, we actual (sic) back then 

had physical human traders and they good profit (sic) for April, May and in June 

they lost about 80 percent. So I got rid of them and got the software working for 

us ... the only way not for people to steal our trades was to bring everything into a 

global pool which MTI has now and we do out (sic) trading you know, on that 

pool account. 

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Compl. ,r 30; Malas Deel. III ,r 30; Malas Deel. III Ex. 3 at MTI-FSCA-31-30 (FSCA Docs.). 

19. Following the heavy losses stained in the April to July 2019 time period, 

Defendants sent a notice to each participant stating in relevant part: 

Over the last couple of weeks, MTI had issues with the traders, which resulted in 

losses for ourselves and the members. We have a solution to recover all member's 

funds. Those willing to take the journey with us over the next few weeks will be 

happily surprised with the trading system that we managed to put together for our 

members .... At the moment, it is not possible to deploy the trading system on all 

FXChoice accounts due to licensing restrictions. We are, however, allowed to use 

the system in a pooled account environment. To switch to the pooled account, 

please follow the steps below. 

Compl. ,r 31; Malas Deel. III ,r 32; Malas Deel. III Ex. 3 at MTI-FSCA-78-2 (FSCA Docs.). 

3. The MTI Pooled Account at FXChoice 

20. Defendants opened a single commodity pool account in the name ofMTI at 

FXChoice, account No.**4850, in August 2019. Compl. ,r 32; Malas Deel. III ,r 34; Malas Deel. 

III Ex. 3 at MTI-FSCA-94-27 (FSCA Docs.). Defendants falsely represented that MTI operated 

a commodity pool that traded forex contracts and that the only assets they accepted for 

investment in the Pool account was Bitcoin. Compl. ,r 32; Malas Deel. III ,r,r 8, 34; Malas Deel. 

III Ex. 3 at MTI-FSCA-94-27 (FSCA Docs.). Specifically, Defendants claimed to be trading 

foreign currency pairs in the Pool account, initially at FXChoice, and later purportedly at 

Trade300. Compl. ,r 32; Malas Deel. III ,r,r 30, 31c, 45-48; Malas Deel. III Ex. 3 at MTI-FSCA89-3 to 89-4, 89-15 (FSCA Docs.), Ex. 4 at MTI-BFSC-52 to 56 (Belize International Financial 

Services Commission Docs). Pool participants registered via Defendants' websites, and 

Defendants directed participants to transfer their Bitcoin to one of the MTI E-W allets, which 

were controlled by Steynberg. Compl. ,r 32; Malas Deel. III ,r,r 28, 34; Malas Deel. III Ex. 3 at 

MTI-FSCA-89-14, 94-27 (FSCA Docs.). Defendants then purportedly transferred the Bitcoin to 

the MTI Pool account at FXChoice, and later, to an MTI Pool account at Trade300. 

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Compl. ii 32; Malas Deel. III iii! 28, 33, 45-48; Malas Deel. III Ex. 3 at MTI-FSCA-38-2 to 38-7, 

78-2 to 78-3, 89-4, 89-14 (FSCA Docs). Throughout the Relevant Period, Steynberg was in sole 

control of the MTI E-Wallets receiving participants' funds and controlled the movement of 

Bitcoin from the MTI E-Wallets to FXChoice accounts and elsewhere. Compl. ,i 33; Malas 

Deel. III iii! 34, 41c; Malas Deel. III Ex. 3 at MTI-FSCA-89-14, 94-27 (FSCA Docs). 

21. Beginning on or about August 2019, Steynberg, individually and as the agent of 

MTI, represented that MTI used a high frequency artificial intelligence trading "bot," together 

with a "head trader" and a "trading team," that purportedly traded the Pool's account at 

FXChoice, earning large profits. Compl. ,i 34; Malas Deel. III ,i,i 32, 35-36; Malas Deel. III Ex. 

3 at MTI-FSCA-13-3, 89-3, 89-16 to 89-17 (FSCA Docs.). These representations were false. 

FXChoice records show that the Pool account traded using only a small fraction of participants' 

Bitcoin, that this limited trading was at an overall loss, and that Steynberg made many of the 

trades via a mobile device. Compl. ,i 34; Malas Deel. III ,i,i 13, 38; Malas Deel. III Ex. 3 at MTIFSCA-36-1, 49-4, 89-4, 89-18 to 89-19 (FSCA Docs). 

22. After Defendants created the purported FXChoice Pool account, they provided 

"trading statements" showing profitable trades on behalf of the Pool in this account. Compl. 

ii 35; Malas Deel. III iii! 26d, 37, 38b; Malas Deel. III Ex. 3 at MTI-FSCA-36, 49-4, 89-18 to 89-

21 (FSCA Docs). In fact, these "trading statements" were not associated with any actual pooled 

accounts, but were in fact statements from a simulated "demo" account that never actually traded 

forex, Bitcoin or anything else. Compl. ,i 35; Malas Deel. III ,i,i 26d, 37-38; Malas Deel. III Ex. 

3 at MTI-FSCA-36-1 to 36-4, 89-3, 89-19 to 89-21 (FSCA Docs.). Defendants failed to disclose 

to participants that all of Defendants' representations to participants regarding trading, 

profitability and/or the existence of a commodity pool account were false. Compl. ,i 35; Malas 

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Deel. III 1126a-26d; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 49, 71-4, 78-1, 89-18 to 

89-21, 89-35 to 89-36 (FSCA Docs.). Defendants further failed to disclose to participants that all 

of the purported "trading statements" were false and created by Defendants. Comp 1. 135; Malas 

Deel. III 1137-38; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 89-19 to 89-21 (FSCA 

Docs.). 

4. The Final Phase of the Scheme 

23. On or about June 8, 2020, FXChoice began receiving complaints from MTI 

participants that the trades shown in MTI's trading reports provided to participants did not 

correlate with the live trades purportedly made in MTI's Pool account. Compl. 136; Malas 

Deel. III 138; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 89-19 (FSCA Docs.). 

FXChoice conducted a compliance review of the MTI Pool account and determined that the 

"account statements" provided to participants were actually simulated trades from "demo" 

accounts created by Steynberg via the MT4 application. Compl. 136; Malas Deel. III 138a; 

Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 89-19 (FSCA Docs.). FXChoice further 

determined that Defendants deleted any of the "demo" accounts' "losing" trades in the "account 

statements" and presented only ''winning trades," thereby giving the false impression to 

participants that Defendants' trading "bot" was profitably trading. Compl. 135; Malas Deel. III 

138b; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 89-19 (FSCA Docs.). Finally, 

FXChoice determined that a number of trades in MTI's FX Choice Pool account were manually 

placed via a mobile device. Compl. 1 36; Malas Deel. III 138c; Malas Deel. III Ex. 3 at MTIFSCA-89-19 (FSCA Docs.). 

24. As a result of its compliance investigation, on June 10, 2020, FXChoice blocked 

all transactions in MTI's Pool account pending a compliance review. Compl. 137; Malas Deel. 

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III, 39; Malas Deel. III Ex. 3 at MTI-FSCA-36-2, 89-21 (FSCA Docs). On July 13, 2020, 

Steynberg unsuccessfully attempted to withdraw 280 Bitcoin from the blocked Pool account. 

Compl., 37; Malas Deel. III, 39; Malas Deel. III Ex. 3 at MTI-FSCA-36-2 (FSCA Docs.). 

FXChoice refused Defendants' withdrawal request and informed Defendants that they were 

required to provide audited financial statements for MTI. Compl., 37; Malas Deel. III, 39; 

Malas Deel. III Ex. 3 at MTI-FSCA-36-2 (FSCA Docs.). As a result of Defendants' failure to 

provide FXChoice with the requested audited financial statements, on August 7, 2020, FXChoice 

marked the Pool account No. **4850 as "fraud" and froze the 1,280 Bitcoin remaining in the 

account. Compl. , 37; Malas Deel. III, 39; Malas Deel. III Ex. 3 at MTI-36-2, 56-2 to 56-3, 89-

21 (FSCA Docs.). 

25. Subsequently, Steynberg represented to participants that MTI would transfer all of 

the Pool's trading accounts from FXChoice to a purported online broker identified as Trade300. 

Compl., 38; Malas Deel. III, 45; Malas Deel. III Ex. 3 at MTI-FSCA-89-4 (FSCA Docs.). 

Steynberg further represented to participants that Trade300 was another online forex trading 

platform, and that MTI continued to earn large profits while trading through Trade300. Compl. 

, 38; Malas Deel. III, 45; Malas Deel. III Ex. 3 at MTI-FSCA-89-4 (FSCA Docs.). Steynberg 

testified before the FSCA that MTI's Pool account at Trade300 averaged trading profits of 10% 

per day, and that the MTI Pool account had never experienced a negative profit trading day. 

Compl., 38; Malas Deel. III,, 13, 45-46; Malas Deel. III Ex. 3 at MTI-FSCA-89-4, 89-17 

(FSCA Docs.). Upon information and belief, Trade300 is a fictious trade broker created by 

Steynberg to further the fraudulent scheme. Compl., 38; Malas Deel. III, 47; Malas Deel. III 

Ex. 3 at MTI-FSCA-89-23 to 89-31 (FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-73 (MTI 

Website). 

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Defendants' MisaJ)propriation and Commingling of Participants' Funds 

26. Steynberg, individually and as the agent of MTI, misappropriated pool 

participants' funds by soliciting funds for trading on behalf of the Pool and then depositing and 

holding participants' funds in E-Wallets controlled by Steynberg instead of segregating the funds 

in a pool account and using the funds to trade on behalf of the Pool's participants. Compl. 139; 

Malas Deel. III 1114, 23-25; Malas Deel. III Ex. 3 at MTI-FSCA-65-6 to 65-9, 78-1, 89-16 to 

89-18 (FSCA Docs.). 

27. Throughout the Relevant Period, participants sent 29,421 Bitcoin to Defendants' 

E-Wallets as instructed. Compl. 140; Malas Deel. III 118, 10, 24, 41c; Malas Deel. III Ex. 3 at 

MTI-FSCA-49-1 to 49-3, 78-1, 89-18 (FSCA Docs.). However, Defendants deposited only 

1,846.72 of participants' 29,421 Bitcoin into the FXChoice Pool account. Compl. 140; Malas 

Deel. III 1112, 24, 41c; Malas Deel. III Ex. 3 at MTI-FSCA-36-1, 46-3, 49-1 to 49-3, 78-1, 89-

18 (FSCA Docs.). Defendants never deposited the remaining 27,574 Bitcoin into the FXChoice 

Pool account or any account at Trade300, and failed to use those funds for any trading on behalf 

of participants. Compl. 140; Malas Deel. III 1 12, 14, 24-25; Malas Deel. III Ex. 3 at MTIFSCA-46-3, 49-1 to 49-3, 78-1, 89-18 (FSCA Docs.). Instead, Steynberg, individually and as 

the agent ofMTI, misappropriated participants' Bitcoin for his personal use. Compl. 140; Malas 

Deel. III 11 14, 23-25; Malas Deel. III Ex. 3 at MTI-FSCA-46-3, 49-1 to 49-3, 65-6 to 65-9, 78-

1, 89-18 (FSCA Docs.). 

28. Defendants also misappropriated some of participants' funds by providing Bitcoin 

to certain participants as purported trading "profits" or "bonuses" in order to create the illusion 

that the Pool was trading and trading profitably. Compl. 141; Malas Deel. III 1114, 23; Malas 

Deel. III Ex. 3 at MTI-FSCA-49-1 to 49-3 (FSCA Docs.). 

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29. At no time did Defendants create, or MTI operate, the Pool as an entity 

cognizable as a legal entity separate from the pool operator, MTI. As a result, at no time were 

any assets, in this case Bitcoin, from pool participants received in the Pool's name because a 

separate legal entity in the name of the Pool was never created. Compl. 1 42; Malas Deel. III 

117a, 9, 10, 22, 24-25; Malas Deel. III. Ex. 1 at MTI-NFA-2-1, 5-1 to 5-2, 6-1 to 6-2 (NFA 

Certs.), Ex. 2 at MTI-TSSB-68-9 (TSSB Docs.), Ex. 3 at MTI-FSCA-89-35 (FSCA Docs.). 

30. During the Relevant Period, Defendants, by and through Steynberg, failed to 

maintain pool assets separately from Steynberg's own funds. Compl. 143; Malas Deel. III 

126b; Malas Deel. III Ex. 3 at MTI-FSCA-49-1 to 49-3, 65-6 to 65-9, 89-35 to 89-36 (FSCA 

Docs.). Steynberg, individually and as the agent of MTI, commingled pool participants' assets 

with personal funds of Steynberg. Compl. 143; Malas Deel. III 1123-25; Malas Deel. III Ex. 3 

at MTI-FSCA-46-3, 49-1 to 49-3, 65-6 to 65-9, 78-1, 89-18 (FSCA Docs.). Defendants held 

participants' assets in Steynberg' s personal E-Wallets instead of segregating them in a pool 

account. Compl. 143; Malas Deel. III 1125, 26b, 41c, 42-44; Malas Deel. III Ex. 3 at MTIFSCA-36-1, 49-1 to 49-3, 65-6 to 65-9, 78-1, 89-35 to 89-36 (FSCA Docs.). 

Defendants' Material Omissions and Misrepresentations of Material Facts 

31. In furtherance of the fraudulent scheme, Defendants knowingly made material 

omissions of fact in solicitations and other communications with actual and prospective pool 

participants, including by failing to disclose that: 

a. Defendants misappropriated pool participants' funds by soliciting funds for trading and 

then retaining participants' funds in Steynberg's personal E-Wallets instead of 

segregating the funds in a pool account and using the funds to trade on behalf of the Pool. 

Compl. 144a; Malas Deel. III 1123-25, 26b; Malas Deel. III Ex. 3 at MTI-FSCA-46-3, 

49-1 to 49-3, 65-6 to 65-9, 78-1, 89-18, and 89-35 to 89-36 (FSCA Docs.); 

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b. There was no trading "bot" successfully trading on behalf of participants. Comp 1. ,r 44b; 

Malas Deel. III ,r,r 13, 26a; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 49-1 to 49-

3, 71-4, 89-18 (FSCA Docs.); 

c. No profitable trading in forex, or anything else, took place on behalf of pool participants. 

Compl. ,r 44c; Malas Deel. III ,r,r 13, 26a-26d, 38; Malas Deel. III Ex. 3 at MTI-FSCA36-1 to 36-4, 49-1 to 49-3, 71-4, 89-19 to 89-21 (FSCA Docs.); 

d. "Account statements" provided to participants were actually simulated trades from 

"demo" accounts created via the MT4 application. Compl. ,r 44d; Malas Deel. III ,r,r 26d, 

38a; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 89-19 to 89-21 (FSCA Docs.); 

e. The broker Trade300 did not exist and was created by Steynberg to further the fraudulent 

scheme. Compl. ,r 44e; Malas Deel. III ,r 47; Malas Deel. III Ex. 3 at 89-23 to 89-31 

(FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-73 (MTI Website); and, 

f. Purported "returns" paid to some pool participants were in fact the principal deposits of 

other participants and were not generated by profitable trading. Compl. ,r 44f; Malas 

Deel. III ,r 26c; Malas Deel. III Ex. 3 at MTI-FSCA-49-1 to 49-3, 89-18 (FSCA Docs.). 

32. Similarly, during the Relevant Period, Defendants, by and through Steynberg, 

misrepresented, among other things, that: 

a. Pool participants' Bitcoin would be pooled and used to trade forex contracts on 

participants' behalf. Compl. ,r 45a; Malas Deel. III ,r,r 13, 23-25, 26a to 26d, 38; Malas 

Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 46-3, 49-1 to 49-3, 65-6 to 65-9, 71-4, 78-1, 

89-18, 89-35 to 89-36 (FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-5-1 (MTI Website); 

b. Profits were achieved through trading. Compl. ,r 45b; Malas Deel. III ,r,r 13, 26a-26d, 38; 

Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 46-3, 49-1 to 49-3, 65-6 to 65-9, 71-4, 

78-1, 89-18, 89-35 to 89-36 (FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-5-1 (MTI 

Website); and 

c. Trading "profits" were distributed to participants. Compl. ,r 45c; Malas Deel. III ,r,r 13, 

26a-26d, 38; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 46-3, 49-1 to 49-3, 65-6 

to 65-9, 71-4, 78-1, 89-18, 89-35 to 89-36 (FSCA Docs.). 

33. These representations were false because Defendants deposited only a small 

portion of participants' Bitcoin into the FXChoice Pool account for a limited time period. 

Compl. ,r 46; Malas Deel. III ,r,r 12, 24, 41c; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 

46-3, 49-1 to 49-3, 78-1, 89-18 (FSCA Docs.). The FXChoice Pool account never traded 

15 
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profitably, there was no Trade300 account, and there were no profits to distribute to participants. 

Compl. ,r 46; Malas Deel. III ,r,r 13, 23-25, 26a-26d, 38, 46; Malas Deel. III Ex. 3 at MTI-FSCA36-1 to 36-4, 49-1 to 49-3, 65-6 to 65-9, 71-4, 89-18 to 89-19, 89-25, 89-29, 89-35 to 89-36 

(FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-73 (MTI Website). 

Defendants' Failure to Register 

34. During the Relevant Period, MTI acted in a capacity as a CPO by soliciting, 

accepting, and receiving funds, securities, or property, in this case Bitcoin, from the public while 

engaged in a business that is of the nature of an investment trust, syndicate, or similar form of 

enterprise, for the purpose of, among other things, trading in forex, without being registered with 

the CFTC as a CPO. Compl. ,r 47; Malas Deel. III ,r,r 7a, 8, 26e; Malas Deel. III Ex. 1 at MTINFA-2-1, 5-1 to 6-2 (NFA Certs.). 

35. Throughout the Relevant Period, Steynberg acted in a capacity as an AP of MTI 

by, in his capacity as a partner, officer, employee, consultant or agent of the CPO MTI, soliciting 

or supervising the solicitation of funds for participation in the Pool, without being registered with 

the CFTC as an AP of a CPO. Compl. ,r 48; Malas Deel. III ,r,r 7b, 8, 26e; Malas Deel. III Ex. 1 

at MTI-NFA-2-1, 7-1 to 8-2 (NFA Certs.). 

36. On or about July 7, 2020, the Texas State Securities Board ("TSSB") issued a 

Cease and Desist Order against Steynberg and MTI, among others, finding their solicitations 

were materially misleading, and that they were operating a fraudulent MLM scheme involving 

digital assets and forex, which had defrauded Texas residents. Compl. ,r 49; Malas Deel. III ,r 9; 

Malas Deel. III Ex. 2 at MTI-TSSB-68-1 to 68-17 (TSSB Docs.). The TSSB ordered Steynberg 

and MTI to immediately cease and desist all operations in the State of Texas. Compl. ,r 49; 

Malas Deel. III ,r 9; Malas Deel. III Ex. 2 at MTI-TSSB-68-16 to 68-17 (TSSB Docs.). Despite 

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the issuance of this Order, upon information and belief Defendants continued to unlawfully 

solicit residents in Texas. Compl. 149; Malas Deel. III 19. 

B. Conclusions of Law 

1. Defendant's Failure to Properly Answer Warrants Entry of Default 

Judgment 

3 7. Fed. R. Civ. P. 5 5 authorizes a default judgment when "a party against whom a 

judgment for affirmative relief is sought has failed to plead or otherwise defend." Fed. R. Civ. P. 

55(a). A default judgment issued by a court pursuant to Fed. R. Civ. P. 55(b )(2) after the court 

clerk's entry of default is within the trial court's sound discretion. Gonzales v. Smitty, No. 1 :20-

cv-0605, 2021 WL 8055637, at *2 (W.D. Tex. Oct. 7, 2021) (citing Mason v. Lister, 562 F.2d 

343,345 (5th Cir. 1977)). In making the determination of whether a default judgment is 

warranted, district courts in the Fifth Circuit utilize a three-step analysis: (1) whether default 

judgment is procedurally proper, based upon six factors identified in Lindsey v. Prive Corp. 161 

F.3d 886 (5th Cir. 1998); (2) if procedurally proper, "whether the plaintiffs' claims are 

substantively meritorious;" and (3) if substantively meritorious, whether the requested relief is 

appropriate. CFTC v. Ramirez, No. 4:19-cv-140, 2019 WL 4198857, at *7 (S.D. Tex. July 17, 

2021) (default order) (quoting Travelers Cas. & Sur. Co. of Am. v. HighMark Constr. Co., LLC, 

No. 7:16-cv-00255, 2018 WL 4334016, at *2 (S.D. Tex. May 5, 2018)). All of these elements 

weigh in favor of the entry of default judgment. The well-pleaded facts of the Complaint 

establish Defendant's liability, and the evidence submitted by the CFTC establishes the 

appropriate amount of restitution and civil monetary penalty to be awarded. 

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2. Jurisdiction and Venue 

38. The Court has jurisdiction over has jurisdiction over this action pursuant to 7 

U.S.C. § 13a-1, which provides that whenever it shall appear to the CFTC that any person has 

engaged, is engaging, or is about to engage in any act or practice constituting a violation of any 

provision of the Act or any rule, regulation, or order promulgated thereunder, the CFTC may 

bring an action in the proper district court of the United States against such person to enjoin such 

act or practice, or to enforce compliance with the Act, or any rule, regulation or order thereunder. 

39. Venue properly lies with this Court pursuant to 7 U.S.C. § 13a-l(e), because the 

Defendants transacted business in this jurisdiction and the acts and practices in violation of the 

Act and Regulations occurred within this District, among other places. 

3. Steynberg Violated 7 U.S.C. § 6b(a)(2)(A)-(C) and 17 C.F.R. § 5.2(b)(l)-(3) 

(2022) (Count I: Fraud in Connection with Forex Contracts) 

40. 7 U.S.C. § 6b(a)(2)(A)-(C) of the Act makes it unlawful for any person: (A) to 

cheat or defraud or attempt to cheat or defraud another 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; or (C) willfully to deceive or attempt to deceive 

another person by any means whatsoever in connection with certain off-exchange commodity 

contracts. Pursuant to 7 U.S.C. § 2(c)(2)(C)(iv), 7 U.S.C. § 6b applies to the forex agreements, 

contracts, or transactions offered by Defendants "as if' they were contracts of sale of a 

commodity for future delivery. Further, 7 U.S.C. § 2(c)(2)(C)(ii)(I) makes the forex agreements, 

contracts, or transactions at issue here "subject to" 7 U.S.C. § 6b. Finally, 7 U.S.C. 

§ 2(c)(2)(C)(vii) makes clear that the CFTC has jurisdiction over an account or pooled 

investment vehicle that is offered for the purpose of forex transactions described in 7 U.S.C. 

§ 2( c )(2)(C)(i). 

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41. In substantially identical language to 7 U.S.C. § 6b(a)(2)(A)-(C), 17 C.F.R. 

§ 5.2(b)(l)-(3) (2022) makes it unlawful for any person, by use of the mails or any means or 

instrumentality of interstate commerce, directly or indirectly, in or in connection with any retail 

forex transaction: (1) to cheat or defraud or attempt to cheat or defraud any person; (2) willfully 

to make or cause to be made to any person any false report or statement or cause to be entered 

for any person any false record; or (3) willfully to deceive or attempt to deceive any person by 

any means whatsoever. However, unlike in 7 U.S.C. § 6b(a)(2)(A)-(C), 17 C.F.R. § 5.2(b)(l)-(3) 

(2022) requires that the acts or omissions involve "instrumentalities of interstate commerce." 

Here, Defendants used instrumentalities of interstate commerce, including emails and websites, 

to fraudulently solicit, misrepresent, or omit material facts, misappropriate funds, and provide 

false trading account statements to participants. Compl. ,, 1, 3, 22, 32; Malas Deel. III,, 13-21, 

23-26, 36-38; Malas Deel. III Ex. 2 at MTI-TSSB-68-1 to 68-17 (TSSB Docs.), Ex. 3 at MTIFSCA-36-1 to 36-4, 49-1 to 49-3, 65-1 to 65-9, 89-3 to 89-36 (FSCA Docs.), Ex. 5 at MTITSSB-204-1 to 204-3 (TSSB Docs.), Ex. 7 atMTI-CFTC-WEB-7-1 to 7-3, 75_1 to 77_1-6 (MTI 

Social Media). 

i. Steynberg Committed Fraud by Making Omissions and 

Misrepresentations of Material Fact 

1. Omissions and Misrepresentations 

42. To establish liability for fraud based on misrepresentations and omissions under 7 

U.S.C. § 6b(a)(2)(A)-(C), the CFTC must prove that: (1) a misrepresentation, false or 

misleading statement, or deceptive omission was made; (2) with scienter; and (3) the 

misrepresentation, false or misleading statement, or deceptive omission was material. R.J. 

Fitzgerald, 310 F.3d at 1328; see also In re Slusser, CFTC No. 94-14, 1999 WL 507574, at *9 

(July 19, 1999) (holding that CFTC's findings regarding fraud were supported by substantial 

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evidence), ajf'd and remanded on other grounds sub nom., Slusser v. CFTC, 210 F.3d 783, 785-

86 (7th Cir. 2000). Similarly, 17 C.F.R. § 5.2(b)(l)-(3) (2022) makes it unlawful, in connection 

with off-exchange retail forex transactions, to use the mails or any means or instrumentality of 

interstate commerce to cheat or defraud or attempt to cheat or defraud any person, or willfully 

deceive any person by any means. CFTC v. Alcocer, No. 1: 12-cv-23459, 2013 WL 12104892, at 

*9 (S.D. Fla. Apr. 5, 2013) (default order). 

43. When determining whether a misrepresentation has been made, one must look to 

the "overall message" and the "common understanding of the information conveyed." R.J 

Fitzgerald, 310 F.3d at 1328 (internal quotation marks and citation omitted). "Any guarantee of 

profit and assurance against loss in the context of futures trading is inherently a fraudulent 

misrepresentation because investments in futures transactions necessarily depend on speculative 

predictions about an unpredictable future and risk is unavoidable." CFTC v. Std. Forex, Inc., No. 

1:93-cv-88, 1993 WL 809966, at *21 (E.D.N.Y. Aug. 9, 1993). Failure to inform customers 

about the inherent risks associated with trading commodity option contracts "while projecting 

large profits amounts to fraud." CFTC v. Commonwealth Fin. Grp., 874 F. Supp. 1345, 1354 

(S.D. Fla. 1994); see also CFTC v. Weinberg, 287 F. Supp. 2d 1100, 1107 (C.D. Cal. 2003) 

(finding that "by guaranteeing profits to his investors, [defendant] made material 

misrepresentations that constitute fraud under Sections 4b(a)(i) and (iii) of the Act"). 

44. During the Relevant Period, Steynberg committed fraud, including by making 

omissions and misrepresentations of material fact to attract and retain participants to enter into 

forex transactions in violation of 7 U.S.C. § 6b(a)(2)(A)-(C) and 17 C.F.R. § 5.2(b)(l)-(3) 

(2022). Compl. ,r 54; Malas Deel. III ,r,r 9, 26; Malas Deel. III Ex. 2 at MTI-TSSB-68-1 to 68-17 

(TSSB Docs.), Ex. 3 at MTI-FSCA-36-1 to 36-4, 49-1 to 49-3, 65-6 to 65-9, 71_ 4, 89-18 to 89-

20 
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21, 89-35 to 89-36 (FSCA Docs.). Steynberg failed to disclose, among other things, that: (l) 

Defendants misappropriated pool participants' funds by soliciting funds for trading and then 

retaining participants' funds in Steynberg' s personal E-Wallets instead of segregating the funds 

in a pool account and using the funds to trade on behalf of participants as promised; (2) 

Defendants were not registered with the CFTC as CPOs and as an AP of a CPO, respectively, as 

required by the Act and were therefore operating an unlawful business enterprise; and 

(3) purported "returns" paid to some participants were in fact the principal deposits of other 

participants. Compl., 44; Malas Deel. III, 26; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-

4, 49-1 to 49-3, 65-6 to 65-9, 71_ 4, 89-18 to 89-21, 89-35 to 89-36 (FSCA Docs.). 

45. Similarly, during the Relevant Period, Steynberg has misrepresented, among other 

things, that: ( l) pool participants' Bitcoin would be pooled and used to trade binary options 

contracts for the benefit of participants; (2) profits were achieved through trading; and (3) trading 

profits were distributed to participants. Compl., 45; Malas Deel. III,, 13, 22-25, 26a-26d, 38; 

Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 46-3, 49-1 to 49-3, 65-6 to 65-9, 71-4, 78-1, 

89-3 to 89-4, 89-17 to 89-21, 89-35 to 89-36 (FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-3-1, 3-

3(MTI Website). These representations were false because only a small portion of participants' 

Bitcoin was deposited into the FXChoice Pool account for a limited time period; the FXChoice 

Pool account never traded profitably; and there were no profits to distribute to participants. 

Compl., 46; Malas Deel. III,, 11-12, 22-26d, 37, 40c, 46; Malas Deel. III Ex. 3 at MTI-FSCA36-1 to 36-4, 50-1, 71-4, 89-3 to 89-4, 89-18 to 89-19, 89-35 to 89-36 (FSCA Docs.). 

2. Sci enter 

46. To establish the scienter element of fraud, the CFTC must show that Steynberg's 

conduct was either reckless or intentional. "Proof of scienter requires evidence that a Defendant 

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committed the alleged wrongful acts intentionally, or that the representations were made with a 

reckless disregard for their truth or falsity." CFTC v. Driver, 877 F. Supp. 2d 968,977 (C.D. 

Cal. 2012) (internal citations and quotations omitted); see also CFTC v. Noble Metals Int'!, Inc., 

67 F.3d 766, 774 (9th Cir. 1995) (holding that scienter is established when defendants act 

intentionally or with "careless disregard"); CFTC v. Nat 'l Invest. Consultants, Inc., No. 3 :05-cv02641, 2005 WL 2072105, at *8 (N.D. Cal. Aug. 26, 2005) (holding that CFTC can establish 

scienter by showing that a defendant "knew the representations were false and were calculated to 

cause harm" or by showing "the representations were made with a reckless disregard for their 

truth or falsity") (citing CFTC v. Noble Wealth Data Info. Servs., Inc., 90 F. Supp. 2d 676,686 

(D. Md. 2000), ajf'd in part, vacated in part, sub nom. CFTC v. Baragosh, 278 F .3d 319 ( 4th 

Cir. 2002)). The CFTC need not prove "an evil motive or intent to injure a customer." Cange v. 

Stotler & Co., 826 F.2d 581,589 (7th Cir. 1987). 

47. Steynberg, individually and as principal and agent of MTI, knew that he was 

making omissions and misrepresentations to actual and prospective participants when he touted 

his trading experience and profitable trading. Compl. ,r,r 44-45; Malas Deel. III ,r,r 13, 26c, 38b; 

Malas Deel. III Ex. 3 at MTI-FSCA-49-1 to 49-3, 89-17 to 89-18 (FSCA Docs.), Ex. 5 at MTICFTC-WEB-3-21, 5-4 (MTI Website). In reality, Steynberg knew or acted with reckless 

disregard of the fact that he unprofitably traded only a small portion of the 29,421 Bitcoin he 

accepted from participants, and that he misappropriated the remaining Bitcoin. Compl. ,r,r 39-43, 

46; Malas Deel. III ,r,r 12-13, 24-25, 41c; Malas Deel. III Ex. 3 at MTI-FSCA-36-1 to 36-4, 46-3, 

49-1 to 49-3, 65-6 to 65-9, 78-1, 89-17 to 89-18 (FSCA Docs.). As the holder of the E-Wallets 

and Bitcoin addresses used to collect funds from participants, and the person in control of the 

Pool account at FXChoice who received actual account statements, Steynberg had personal 

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knowledge of the amount of funds accepted from participants and the disposition of those funds, 

as well as the absence of trading on behalf of participants as promised. Compl. 1132-33; Malas 

Deel. III 118, 30, 34, 41c; Malas Deel. III Ex. 3 at MTI-FSCA-31-30, 36-1 to 36-4, 49-3, 78-1 to 

78-3, 89-3, 89-15, 89-18 (FSCA Docs.). Finally, Steynberg knew or acted in reckless disregard 

of the facts when he failed to disclose that neither he nor MTI were registered with the CFTC as 

required, and Defendants were therefore operating an unlawful business enterprise. Compl. 

1147-48; Malas Deel. III 117, 26e; Malas Deel. III Ex. 1 at MTI-NFA-2-1, 5-1 to 8-2 (NFA 

Certs.). 

3. Materiality 

48. A statement is material if "there is a substantial likelihood that a reasonable 

investor would consider the information important in making a decision to invest." In re R& W 

Tech. Servs. Ltd., CFTC No. 96-3, 1999 WL 152619, at *21 (Mar. 16, 1999), aff'd in part R&W 

Tech. Serv. Ltd. v. CFTC, 205 F .3d 165 ( 5th Cir. 2000); see also R.J. Fitzgerald, 310 F .3d at 

1328-29; CFTC v. Matrix Trading Grp., Inc., No. 9:00-cv-8880, 2002 WL 31936799, at *6 (S.D. 

Fla. Oct. 3, 2002) (finding defendants misrepresented and omitted material facts concerning 

likelihood and extent of profits to be made trading commodity options, risks inherent in trading 

such options, and actual performance record in trading commodity options). Any fact that 

enables an investor to assess independently the risk inherent in their investment and the 

likelihood of profit is a material fact. See Driver, 877 F. Supp. 2d at 977 (finding 

"[m]isrepresentations of profit and risk are material"); Matrix Trading Grp., 2002 WL 

31936799, at *6 (finding misstatements and omissions regarding "profit potential, risk ofloss, 

and performance record" were material because "a reasonable investor would have relied on 

these statements in determining whether to invest"). "Misrepresentations as to the trading record 

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and experience of a firm or broker are fraudulent because past success and experience are 

material factors to reasonable customers." CFTC v. Next Fin. Servs. Unlimited, No. 9:04-cv80562, 2006 WL 889421, at *4 (S.D. Fla. Mar. 30, 2006). Furthermore, misrepresentations 

regarding profitability are material because customers or potential customers are likely to rely on 

such information when making their investment decisions. See Commonwealth Fin. Grp., Inc., 

874 F. Supp. at 1354. 

49. As outlined above, Steynberg, individually and as principal and agent of MTI, 

made materially false and misleading statements or omissions of facts to participants. Compl. 

1144-45; Malas Deel. III 117b, 9, 26; Malas Deel. III Ex. lat MTI-NFA-2-1, 7-1 to 8-2 (NFA 

Certs.), Ex. 2 at MTI-TSSB-68-1 to 68-17 (TSSB Docs.), Ex. 3 at MTI-FSCA-36-1 to 36-4, 49-1 

to 49-3, 65-6 to 65-9, 71-4, 89-19 to 89-21, 89-35 to 89-36 (FSCA Docs.). In order to conceal 

and continue the fraudulent scheme, Steynberg made, individually and as the agent ofMTI, 

numerous representations to participants as to why Defendants were not paying profits. 

Steynberg's omissions and misrepresentations were material because they impacted the 

participants' decisions to invest, remain in the Pool, or make additional investments. 

ii. Steynberg Committed Fraud by Misappropriation 

50. The CFTC may also prove fraud if it can show that a person or entity 

misappropriated customer funds. See Noble Wealth Data, 90 F. Supp. 2d at 687 

(misappropriation of customer funds, by diverting them to pay for operating and personal 

expenses, salaries and other expenses, constituted willful and blatant fraudulent activity). 

Misappropriation of customer funds in connection with forex trading constitutes fraud in 

violation of 7 U.S.C. § 6b(a)(2)(A) and (C). See Driver, 877 F. Supp. 2d at 978 (finding that 

"[ s ]oliciting or obtaining funds from investors for trading, then failing to trade the funds while 

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using them for personal and business expenses, is misappropriation" and granting summary 

judgment to CFTC on claims that CPO's misappropriation of customer funds violated 7 U.S.C. 

§ 6b and 60); Weinberg, 287 F. Supp. 2d at 1106 ("Defendant's misappropriation of funds 

entrusted to him for trading purposes is 'willful and blatant fraudulent activity' that clearly 

violates Section 4b(a) of the Act." (quoting Noble Wealth Data, 90 F. Supp. 2d at 687)); CFTC v. 

Giddens, No. 1:11-cv-2038, 2013 WL 12244536, at *9 (N.D. Ga. Jan. 31, 2013) ("[A] 

'misappropriation' of investor funds must involve, at a minimum, the intentional taking or use of 

an investor's money in violation of the terms agreed to by the investor."). 

51. Here, Steynberg misappropriated participants' Bitcoin by soliciting Bitcoin for 

trading and then holding participants' Bitcoin in his personal £-Wallets instead of segregating 

the assets in a pool account and using the funds to trade forex contracts on behalf of participants 

as promised. Compl. ,i,i 39; 43; Malas Deel. III ,i,i 14, 23-25; Malas Deel. III Ex. 3 at MTIFSCA-49-1 to 49-3, 65-6 to 65-9, 78-1, 89-18 (FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-3-1, 3-3 

(MTI Website). Upon information and belief, Steynberg also misappropriated the majority of 

participants' Bitcoin by using the principal deposits of certain participants to pay other 

participants in the manner of a Ponzi scheme. Compl. ,i,i 6, 41; Malas Deel. III ,i,i 14, 23, 26c. 

His conduct constitutes willful and fraudulent activity in violation of 7 U.S.C. § 6b(a)(2)(A)-(C) 

and 17 C.F.R. § 5.2(b)(l)-(3) (2022). See CFTC v. Skorupskas, 605 F. Supp. 923, 932 (E.D. 

Mich. 1985) (finding defendant violated 7 U.S.C. § 6b when she misappropriated pool funds by 

soliciting funds for trading and then trading only a small percentage of those funds, while 

disbursing the rest of the funds to pool participants, herself, and her family); In re Slusser, 1999 

WL 507574, at *12 (finding respondents violated 7 U.S.C. § 6b by surreptitiously retaining pool 

money in their own bank accounts that should have been traded· on behalf of participants). 

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b. Steynberg Violated 7 U.S.C. § 6o(l)(A), (B) (Count II: Fraud by an 

AP of a CPO) 

52. 7 U.S.C. § 6o(l)(A), (B), in relevant part, makes it unlawful for an AP of a CPO, 

by use of the mails or any other means of interstate commerce, directly or indirectly, to: (A) 

employ any device, scheme, or artifice to defraud any participant; or (B) engage in any 

transaction, practice, or course of business that operates as a fraud or deceit upon any participant. 

"[7 U.S.C. § 6o(l)(A), (B)] of the Act broadly prohibits fraudulent conduct by a Commodity 

Pool Operator" and "applies to all CPOs [and APs] whether registered, required to be registered, 

or exempted from registration." Weinberg, 287 F. Supp. 2d at 1107-08 (citing CFTC ex rel. 

Kelley v. Skorupskas, 605 F. Supp. 923, 932 (E.D. Mich. 1985)). Unlike 7 U.S.C. § 6o(l)(A) of 

the Act, the language of 7 U.S.C. § 6o(l)(B) does not require scienter as a prerequisite for 

establishing liability. See, e.g., Commodity Trend Serv., Inc. v. CFTC, 233 F.3d 981, 993 (7th 

Cir. 2000); Messer v. E.F. Hutton & Co., 847 F.2d 673, 678-79 (11th Cir. 1988); First Nat'l 

Monetary Corp. v. Weinberger, 819 F.2d 1334, 1342 (6th Cir. 1987). 

53. The same conduct that constitutes violations of 7 U.S.C. § 6b(a)(2)(A)-(C) 

described above (i.e., Steynberg's misrepresentations and omissions) also constitutes violations 

of 7 U.S.C. § 6o(l)(A), (B). See Weinberg, 287 F. Supp. 2d at 1108 (finding the "same conduct" 

by defendant that violates 7 U.S.C. § 6b(a)(2)(A)-(C) also violates 7 U.S.C. § 6o(l)(A), (B)). 

Even if the CFTC was unable to prove that Steynberg, individually and as principal and agent of 

MTI, had the requisite scienter under 7 U.S.C. § 6o(l)(A) (which is highly unlikely in light of 

the alleged facts), the evidence is more than sufficient to show that Steynberg's actions operated 

as a fraud or deceit upon participants in violation of 7 U.S.C. § 60(1)(8). 

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c. Defendants Violated 17 C.F.R. § 4.20(a)(l), (b), and (c) (2022) (Count 

III: Failure to Operate Commodity Pool as 'a Separate Legal Entity, 

Failure to Receive Funds in the Pool's Name, and Commingling of 

Pool Funds) 

54. With certain specified exceptions and exemptions not applicable here, 17 

C.F.R. § 4.20(a)(l) (2022) provides that a CPO must operate its pool "as an entity cognizable as 

a legal entity separate from that of the pool operator." MTI, who operated the Pool at issue, 

maintained no distinction between itself and the Pool and failed to establish the Pool as a 

separate legal entity. Compl. 142; Malas Deel. III 119, 11, 25-26; Malas Deel. III. Ex. 1 at 

MTI-NFA-2-1, 5-1 to 6-2 (NFA Certs.), Ex. 2 at MTI-TSSB-68-9 (TSSB Docs.), Ex. 3 at MTIFSCA-36-1 to 36-4, 49-1 to 49-3, 56-2 to 56-3, 65-6 to 65-9, 71-4, 78-1, 89-18 to 89-21, 89-35 

to 89-36 (FSCA Docs). As a result, MTI, and Steynberg by extension as a controlling person of 

MTI, violated 17 C.F.R. § 4.20(a)(l) (2022). 

55. In failing to establish the Pool as a separate legal entity, Defendants also violated 

17 C.F.R. § 4.20(b) (2022), which requires all funds, securities, or other property received by a 

CPO from pool participants to be "received in the pool's name." As Defendants unlawfully 

failed to create and maintain the Pool as a separate legal entity, at no time were Bitcoin from 

pool participants "received in the pool's name." Compl. 142; Malas Deel. III 119, 11, 25-26; 

Malas Deel. III Ex. 1 at MTI-NFA-2-1, 5-1 to 6-2 (NFA Certs.), Ex. 2 at MTI-TSSB-68-9 (TSSB 

Docs.), Ex. 3 at MTI-FSCA-36-1 to 36-4, 49-1 to 49-3, 56-2 to 56-3, 65-6 to 65-9, 71-4, 78-1, 

89-18 to 89-21, 89-35 to 89-36 (FSCA Docs.). MTI, and Steynberg by extension as a controlling 

person ofMTI, therefore violated 17 C.F.R. § 4.20(b) (2022) when they accepted pool 

participants' Bitcoin. 

56. Finally, Defendants violated 17 C.F.R. § 4.20(c) (2022), which prohibits a CPO 

from commingling the property of the pool with the property of any other person. While acting 

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as a CPO, MTI, and Steynberg by extension as a controlling person of MTI, violated 17 

C.F.R. § 4.20(c) (2022) by commingling pool participants' Bitcoin with Steynberg's own 

personal assets. Compl. ,r 43; Malas Deel. III ,r,r 23-25; Malas Deel. III Ex. 3 at MTI-FSCA-49-

1 to 49-3, 65-6 to 65-9, 78-1, 89-18 (FSCA Docs.), Ex. 5 at MTI-CFTC-WEB-3-1, 3-3 (MTI 

Website). 

d. Steynberg Violated 7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc) and 6k(2) and 17 

C.F.R. § 5.3(a)(2)(ii) (2022) (Count IV: Failure to Register as an AP 

ofa CPO) 

57. 7 U.S.C. § la(l 1) defines a CPO as, among other things, any person engaged in a 

business that is of the nature of a commodity pool and who solicits, accepts, or receives from 

others funds, securities, or property for the purpose of trading commodity interests. 3 For the 

purposes ofretail forex transactions, a CPO is defined in 17 C.F.R. § 5. l(d)(l) (2022) as "any 

person who operates or solicits funds, securities, or property for a pooled investment vehicle that 

is not an eligible contract participant as defined in section la(18) of the Act, and who engages in 

retail forex transactions." MTI was not an ECP as defined in Section la(18) of the Act, 7 U.S.C. 

§ 1 a( 18). During the Relevant Period, MTI acted as a retail forex CPO by soliciting, accepting, 

or receiving participant funds, securities, or property (in the form of Bitcoin), for the purpose of 

trading in commodity interests, including without limitation, forex pairs, purportedly first at 

FXChoice and subsequently at the alleged entity Trade300. Accordingly, the Bitcoin accepted 

3 The Bitcoin Defendants received from participants were "funds" as that term is used in 7 

U.S.C. § la(l 1). See United States v. Murgia, 209 F. Supp. 3d 698, 707-08 (S.D.N.Y. 2016) 

(applying ordinary meaning of "funds" from dictionary where, as here, that term was not defined 

in the relevant statute, and holding that "funds" means "money," which in tum is defined as 

"something generally accepted as a medium of exchange, a measure of value, or a means of 

payment," and concluding that "bitcoins are funds") (citations omitted). Alternatively, the 

Bitcoin solicited and received by Defendants were "property" for purposes of 7 U.S.C. § la(l l). 

See I.R.S. Notice 2014-21, at 2 (Apr. 14, 2014) (stating that for federal tax purposes "virtual 

currency is treated as property"). 

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by Defendants meets the definition of "funds, securities, or property" for a pooled investment. 

See, e.g., CFTC v. Doe 1, No. 4:18-cv-807, 2019 WL 3926809, at *14 (N.D. Tex. June 28, 2019) 

(default order). 

58. 17 C.F.R. § 1.3 (2022) defines an AP of a CPO as any person who is associated 

with a CPO 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 commodity pool; or (ii) the 

supervision of any person or persons so engaged. Further, pursuant to 17 C.F.R. § 5.1 ( d)(2) 

(2022), any person associated with a CPO 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) [t]he solicitation of funds, securities, or property for a participation 

in a pooled vehicle; or (ii) [t]he supervision of any person or persons so engaged" is an AP of a 

retail forex CPO. 

59. 7 U.S.C. § 6k(2) makes it unlawful for any person to be associated with a CPO as 

an officer or agent ( or any 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 

commodity pool, unless such person is registered with the CFTC as an AP of a CPO. Similarly, 

7 U.S.C. § 2( c )(2)(C)(iii)(I)( cc) states that a person shall not operate or solicit funds for any 

pooled investment vehicle in connection with forex transactions, unless registered pursuant to 

CFTC regulations. 17 C.F.R. § 5.3(a)(2)(ii) (2022) requires those that meet the definition of an 

AP of a retail forex CPO as defined by 17 C.F .R. § 5 .1 ( d)(2) (2022) to register as such with the 

CFTC. Steynberg acted as an AP ofMTI throughout the Relevant Period by soliciting funds or 

property (in the form of Bitcoin) for participation in the Pool. Accordingly, Steynberg violated 7 

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U.S.C. §§ 2(c)(2)(C)(iii)(l)(cc), 6k(2) and 17 C.F.R. § 5.3(a)(2)(ii) (2022) by, without being 

registered with the CFTC, soliciting Bitcoin for participation in the Pool. Compl. ,i 48; Malas 

Deel. III ,i,i 7, 8, 26e; Malas Deel. III Ex. 1 at MTI-NFA-2-1, 5-1 to 8-2 (NFA Certs.). 

e. Steynberg Is Liable for MTI's Violations as a Controlling Person 

60. From May 18, 2018 through at least March 2021, Steynberg was the owner, sole 

officer, and President of MTI and has at all times controlled MTI. Compl. ,i,i 33, 56, 67, 76, 87; 

Malas Deel. III ,i,i 7, 17, 21d; Malas Deel. III Ex. 3 at MTI-FSCA-31-58: 13-19 (FSCA Docs.), 

Ex. 5 at MTI-CFTC-WEB-3-6, 3-19 (MTI Website). To establish controlling person liability 

under 7 U.S.C. § 13c(b), the CFTC must show that the person possesses the requisite degree of 

control and either: ( 1) knowingly induced, directly or indirectly, the acts constituting the 

violation; or (2) failed to act in good faith. CFTC v. Equity Fin. Grp. LLC, 572 F.3d 150, 160-61 

(3d Cir. 2009) (finding individual defendants liable as controlling persons for corporation's 

failure to register as commodity pool operator). 

61. To establish the first element, control, a defendant must possess general control 

over the operation of the entity principally liable. See, e.g., R.J. Fitzgerald, 310 F.3d at 1334 

(recognizing an individual who "exercised the ultimate choice-making power within the firm 

regarding its business decisions" as a controlling person). Evidence that a defendant is the sole 

principal, stockholder, member of the board of directors or the authorized signatory on the 

company's bank accounts indicates the power to control a company. In re Spiegel, CFTC No. 

85-19, 1988 WL 232212, at *8 (Jan. 12, 1988). The CFTC must also show that a defendant 

possessed specific control, which is "the power or ability to control the specific transaction or 

activity upon which the primary violation was predicated." Monieson v. CFTC, 996 F .2d 852, 

860 (7th Cir. 1993) (internal quotation marks and citation omitted). The defendant does not need 

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to participate in or benefit from the wrongdoing; the issue is whether the defendant has the power 

to address the illegal conduct. Id. 

62. In addition to control, the CFTC must show the controlling person knowingly 

induced, directly or indirectly, the acts constituting the violation, or did not act in good faith. To 

show knowing inducement, the CFTC must show that a defendant had actual or constructive 

knowledge of the core activities that constituted the violation of the Act or the Regulations, and 

allowed the activities to continue. R.J. Fitzgerald, 310 F .3d at 1334; Spiegel, 1988 WL 232212, 

at *7. To show lack of good faith, the CFTC must show that a defendant failed to maintain a 

"reasonably adequate system of internal supervision and control" or did not oversee the system 

"with any reasonable diligence." Monieson, 996 F.2d at 860. 

63. As to Steynberg's general and specific control, he is the founder, CEO, and 

shareholder of MTI and directed every aspect of the fraudulent scheme. Compl. 121; Malas 

Deel. III 1 7. He directly made omissions and misrepresentations to participants and 

misappropriated participants' funds and controlled the E-Wallets to which participants' Bitcoin 

were sent. Compl. 116, 32, 33; Malas Deel. III 1123-26, 30, 34, 41c; Malas Deel. III Ex. 3 at 

MTI-FSCA-31-30, 36-1 to 36-4, 49-3, 78-1 to 78-3, 89-3, 89-15, 89-18, 94-27 (FSCA Docs.). 

Thus, Steynberg had general control over MTI and specific control over the misconduct upon 

which the primary violations are predicated. In addition, Steynberg knowingly induced the 

violations because he individually had knowledge of the wrongdoing. See Spiegel, 1988 WL 

232212, at *7 ("[W]e reject the view that a controlling person must know that the acts at issue 

amount to a violation in order to be held to have 'knowingly' induced the acts constituting the 

violation .... [I]f the controlling person knowingly induces acts that amount to a violation, he 

will not escape liability merely because he acted in good faith."). Thus, Steynberg is liable as a 

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controlling person for MTI' s violations of the Act and Regulations described in this Motion. 

III. RELIEF GRANTED 

IT IS HEREBY ORDERED THAT: 

A. Permanent Injunction 

64. Based upon and in connection with the conduct described above, pursuant to 7 

U.S.C. § 13a-1, Defendant is permanently restrained, enjoined and prohibited from directly or 

indirectly: 

a. Cheating or defrauding, or attempting to cheat or defraud, other persons; issuing 

or causing to be issued false reports; willfully making or causing to be made to 

other persons any false repo1i or statement or willfully to enter or cause to be 

entered for other persons any false record; and, willfully deceiving or attempting 

to deceive other persons in or in connection with any order to make, or the 

making of, any contract of sale of any commodity for future delivery, or forex 

contract that is made, or to be made, for or on behalf of, or with, any other person 

in violation of 7 U.S.C. § 6b(a)(2)(A)-(C) and 17 C.F.R. § 5.2(b)(l)-(3) (2022); 

b. While acting as a CPO, using the mails or any means or instrumentalities of 

interstate commerce, directly or indirectly to employ any device, scheme, or 

artifice to defraud any participant or prospective participant, or to engage in any 

transaction, practice, or course of business which operates as a fraud or deceit 

upon any participant or prospective participant, in violation of 7 U.S.C. 

§ 6o(l)(A)-(B); 

c. Failing to operate a commodity pool as an entity cognizable as a legal entity 

separate from that of the commodity pool operator in violation of 17 C.F.R. 

§ 4.20(a)(l) (2022); 

d. Receiving funds from existing or prospective participants for the purchase of an 

interest in a commodity pool without receiving the same in the commodity pool's 

name in violation of 17 C.F.R. § 4.20(b) (2022); 

e. Commingling the property of any commodity pool that he operates or that he 

intends to operate with the property of any other person in violation of 17 C.F.R. 

§ 4.20(c) (2022); 

f. Acting as an associated person of a CPO without registering with the CFTC as an 

AP of a CPO in violation of7 U.S.C. §§ 2(c)(2)(C)(iii)(I)(cc), 6k(2), and 17 

C.F.R. § 5.3(a)(2)(ii) (2022); 

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65. Defendant is also permanently restrained, enjoined and prohibited from directly or 

indirectly: 

a. Trading on or subject to the rules of any registered entity (as that term is defined 

by 7 U.S.C. § la(40)); 

b. Entering into any transactions involving "commodity interests" (as that term is 

defined in 17 C.F.R. § 1.3 (2022)), for Defendant's own personal accounts or for 

any account in which he has a direct or indirect interest; 

c. Having any commodity interests traded on his behalf; 

d. 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; 

e. Soliciting, receiving, or accepting any funds from any person for the purpose of 

purchasing or selling of any commodity interests; 

f. 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 

17 C.F.R. § 4.14(a)(9) (2022); and 

g. Acting as a principal (as that term is defined in 17 C.F.R. § 3. l(a) (2022)), agent, 

or any other officer or employee of any person (as that term is defined in 7 U.S.C. 

§ la(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) (2022). 

B. Restitution 

66. 7 U.S.C. § 13a-l(d)(3)(A) authorizes the CFTC to seek, and the Court to order, 

"restitution to persons who have sustained losses proximately caused by [a] violation [ of the Act 

or Regulations] (in the amount of such losses)." Restitution exists to restore the status quo and 

make the injured party whole. Porter v. Warner Holding Co., 328 U.S. 395, 402 (1946) 

( equitable restitution consists of "restoring the status quo and ordering the return of that which 

rightfully belongs to the purchaser or tenant"). Accordingly, courts calculate restitution "as the 

difference between what Defendants obtained and the amount customers have already received 

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back." CFTC v. Ross, No. 1:09-cv-5443, 2014 WL 6704572, at *3 (N.D. Ill. Nov. 26, 2014); see 

also CFTC v. Driver, 877 F. Supp. 2d 968,981 (C.D. Cal. 2012) (finding that restitution exists to 

"restore the status quo" and reflects "the difference between what defendants obtained and the 

amount customers received back"). Where, as here, a defendant engages in systematic and 

pervasive fraud, all funds obtained by the illegal enterprise may be included in the calculation of 

restitution. See CFTC v. McDonnell, 332 F. Supp. 3d 641, 726-27 (E.D.N.Y. 2018) (holding that 

in cases of pervasive fraud under the Act, the appropriate calculation of restitution includes all 

customer losses even where only a subset of those customers testify to the losses they sustained 

on the grounds that reliance on the defendant's fraud is presumed). 

67. Steynberg's illegal conduct, as detailed herein, proximately caused participants to 

incur net losses totaling not less than $1,733,838,372. Accordingly, Steynberg shall pay 

restitution in the amount of $1,733,838,372. 

68. If the Restitution Obligation is not paid immediately, 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. 

69. To effect payment of the Restitution Obligation and the distribution of any 

restitution payments to Defendants' participants, the Court appoints the National Futures 

Association ("NF A") as Monitor ("Monitor"). The Monitor shall receive restitution payments 

from Defendant and make distributions as set forth below. Because the Monitor is acting as an 

officer of this Court in performing these services, the NF A shall not be liable for any action or 

inaction arising from the NF A's appointment as Monitor, other than actions involving fraud. 

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70. Defendants shall make Restitution Obligation payments, and any post-judgment 

interest payments, under this Order to the Monitor in the name "Cornelius Steynberg Restitution 

Fund" and shall send such payments by electronic funds transfer, or by 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 cover letter that identifies the paying Defendant and the name and docket number of this 

proceeding. The paying Defendant shall simultaneously transmit 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. 

71. The Monitor shall oversee the Restitution Obligations and shall have the 

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

Defendants' participants identified by the CFTC or may defer distribution until such time as the 

Monitor deems appropriate. 

72. Defendant shall cooperate with the Monitor as appropriate to provide such 

information as the Monitor deems necessary and appropriate to identify Defendants' participants 

to whom the Monitor, in its sole discretion, may determine to include in any plan for distribution 

of any Restitution Obligation payments. Defendant 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 Obligation. 

73. The Monitor shall provide the CFTC at the beginning of each calendar year with a 

report detailing the disbursement of funds to Defendants' clients during the previous year. The 

Monitor shall transmit this report under a cover letter that identifies the name and docket number 

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of this proceeding to the Chief Financial Officer, Commodity Futures Trading Commission, 

Three Lafayette Centre, 1155 21st Street, NW, Washington, D.C. 20581. 

74. The amounts payable to each participant shall not limit the ability of any client 

from proving that a greater amount is owed from Defendants or any other person or entity, and 

nothing herein shall be construed in any way to limit or abridge the rights of any client exist 

under state or common law. 

75. Pursuant to Rule 71 of the Federal Rules of Civil Procedure, each participant of 

Defendants who suffered a loss is explicitly made an intended third-party beneficiary of this 

Order and may seek to enforce obedience of this Order to obtain satisfaction of any portion of 

the restitution that has not been paid by Defendant to ensure continued compliance with any 

provision of this Order and to hold Defendant in contempt for any violations of any provision of 

this Order. 

76. To the extent that any funds accrue to the U.S. Treasury for satisfaction of 

Defendant's Restitution Obligation, such funds shall be transferred to the Monitor for 

disbursement in accordance with the procedures set forth above. 

C. Civil Monetary Penalty 

77. 7 U.S.C. § 13a-l(d)(l)(A) authorizes the imposition of a civil monetary penalty 

("CMP") equal to the higher of triple a defendant's monetary gain from each violation of the 

Act, or $214,514 per violation. 4 "The court should consider a variety of factors in assessing a 

CMP, and has broad discretion in fashioning an appropriate remedy that is 'rationally related to 

the offense charged or the need for deterrence."' CFTC v. Yorkshire Grp., Inc., No. 1:13-cv4 Pursuant to the associated regulation, 17 C.F.R. § 143.8(b)(l) (2022), the allowable inflationadjusted civil monetary penalty is $214,514 per violation of the Act (effective Jan. 15, 2023) for 

non-manipulation claims brought in federal injunctive actions under 7 U.S.C. § 13a-1. 

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5323, 2016 WL 8256380, at *6 (E.D.N.Y. Aug. 19, 2016) (quoting CFTC v. Levy, 541 F.3d 

1102, 1112 (11th Cir. 2008)). 

78. Courts consider numerous factors in determining an appropriate CMP under the 

Act, including "(1) whether Defendants' illegal acts violated core provisions of the Act; (2) 

whether Defendants acted with scienter; (3) the consequences resulting from Defendants' 

violations; (4) the financial benefits to Defendants; and (5) the harm to Defendants' customers." 

CFTC v. Cifuentes, No. 2:16-cv-6167, 2018 WL 1904196, at *11 (D.N.J. Apr. 20, 2018). Courts 

routinely award significant CMPs in cases involving fraud. See, e.g., CFTC v. Wright, No. 1: l 7-

cv-4722, 2018 WL 6437055, at *5 (S.D.N.Y. Dec. 7, 2018) (entering default judgment and 

ordering a CMP of "treble damages" where defendant "intentionally implemented over a period 

of years an extensive artifice to obtain clients' money and divert those funds to personal and 

other unauthorized purposes instead of investing these funds"). 

79. Acting intentionally, Steynberg committed repeated violations of the core 

antifraud provisions of the Act that caused significant monetary losses to participants. The 

multi-year scheme included misrepresentations and omissions, the fabrication and issuance of 

fraudulent account statements showing fictional trades, and misappropriation of participants' 

funds for unauthorized purposes. 

80. Given this conduct, Steynberg shall pay a civil monetary penalty in the amount of 

$1,733,838,372 ("CMP Obligation"), which is equal to one time the funds Defendants 

fraudulently solicited and obtained. 

81. Defendant shall pay his CMP Obligation and any post-judgment interest, by 

electronic funds transfer, U.S. postal money order, certified check, bank cashier's check, or bank 

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money order. If payment is to be made other than by electronic funds transfer, then the payment 

shall be made payable to the CFTC and sent to the address below: 

MMAC/ESC/ AMK326 

Commodity Futures Trading Commission 

6500 S. MacArthur Blvd. 

HQRoom266 

Oklahoma City, OK 73169 

9-amc-ar-cftc@faa.gov 

If payment by electronic funds transfer is chosen, Defendant shall contact Tonia King or her 

successor at the address above to receive payment instructions and shall fully comply with those 

instructions. Defendant shall accompany payment of the CMP Obligation with a cover letter that 

identifies Defendant and the name and docket number of this proceeding. Defendant shall 

simultaneously transmit 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, 

N.W., Washington, D.C. 20581. 

D. Miscellaneous Provisions 

82. Partial Satisfaction: Acceptance by the CFTC of any partial payment of 

Defendant's CMP Obligation shall not be deemed a waiver of his obligation to make further 

payments pursuant to this Order or a waiver of the CFTC's right to seek to compel payment of 

any remaining balance. 

83. Notice: All notices required to be given by any provision in this Order 

shall be sent certified mail, return receipt requested, as follows: 

Notice to Commission: 

Ian McGinley 

Director, Division of Enforcement 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street, N.W. 

Washington, DC 20581 

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Case 1:22-cv-00635-LY Document 27 Filed 04/24/23 Page 39 of 39

All such notices to the CFTC shall reference the name and docket number of this action. 

84. Invalidation: If any provision of this Order or if the application of any provision 

or circumstance is held invalid, then the remainder of this Order and the application of the 

provision to any other person or circumstance shall not be affected by the holding. 

85. Continuing Jurisdiction of this Court: This Court shall retain jurisdiction of this 

action to ensure compliance with this Order and for all other purposes related to this action, 

including any motion by Defendant to modify or for relief from the terms of this Order. 

86. Injunctive and Equitable Relief Provisions: The injunctive and equitable relief 

provisions of this Order shall be binding upon Defendant, upon any person under his authority or 

control, and upon any person who receives actual notice of this Order, by personal service, email, facsimile or otherwise insofar as he or she is acting in active concert or participation with 

Defendant. 

THERE BEING NO JUST REASON FOR DELAY, the Clerk of the Court is hereby 

ordered to enter this Order for Final Judgment by Default, Permanent Injunction, Civil Monetary 

Penalty, and Other Statutory and Equitable Relief Against Defendant Steynberg forthwith and 

without further notice. 

IT IS SO ORDERED, at Austin, Texas on this~ da 0£ ~ , 2023. 

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