Platforms · Software · Providers · Markets
The U.S. District Court for the Eastern District of Louisiana ordered Michael B. DePetrillo, Meteor LLC and NOLA FX Capital Management LLC to pay a $9,211,492 civil penalty. Its default judgment also permanently excludes all three defendants from CFTC-regulated markets and registration with the Commodity Futures Trading Commission.
Penalty follows criminal sentence
DePetrillo pleaded guilty in February 2025. In July 2025, he received a nine-year prison sentence and an order to pay victims $6,748,412 in restitution. The civil penalty is additional, taking the court-ordered payments to nearly $16 million.
Fund pitch hid diverted cash
Investors were told their contributions would be combined in the NOLA FX Fund to trade leveraged currency contracts. Instead, the court found that money from later participants went towards payments to earlier investors, while fabricated statements depicted profitable trading.
The Justice Department said DePetrillo raised approximately $9.2 million from around 55 investors over seven years. In the civil action, the court found that more than $3 million had been misappropriated. The money went to payouts, DePetrillo's personal spending and trades in accounts he controlled.
Other fraud cases remain allegations
The CFTC has also pursued cases involving purported trading pools. In August, it sued Goliath Ventures, alleging the firm solicited at least $397 million for cryptocurrency trading and reported fictitious profits. The following month, the agency brought a case against Cash FX Group, alleging it collected more than $950 million for a forex pool, traded little and used new deposits to pay earlier participants. Both sets of figures remain allegations in the lawsuits. Finance Magnates also reported on the DePetrillo judgment. Before the CFTC's civil action concluded, the criminal court had sentenced him and directed him to make restitution.
What this changes for operators
For firms running pooled FX products, this case makes the relationship between cash movements, trading records and investor reporting an operational question. Do account statements reconcile to executed trades, and can deposits and withdrawals be traced through the pool to individual participants? Operators should be able to establish whether reported returns reflect trading activity rather than cash entering the fund.
Risk and operations teams should also ask what prevents incoming subscriptions from funding earlier payouts, and how activity in personal or proprietary accounts is separated from investor money. The judgment does not specify which controls failed, so operators should check what independent reconciliation, access restrictions and approval records their own processes provide. They should also consider how discrepancies between investor statements, account balances and trading activity are detected, escalated and corrected.
