Emerson Pires and Flavio Goncalves, co-founders of the EmpiresX Ponzi scheme, have copped a $45.8 million judgment in their SEC fraud case.

Pires’ and Goncalves’ judgment follows the SEC filing for default judgment on June 5th.

The SEC initially
sued Pires and Goncalves in June 2022
, alleging EmpiresX was a $40 million Ponzi scheme.

As noted in the judgment;

When Pires and Goncalves failed to respond to the (SEC’s) Complaint, a Clerk’s Default was entered against them on April 20, 2023.

By virtue of their default, Pires and Goncalves have admitted the following facts:

In less than two years, EmpiresX raised at least $40 million by selling its securities to thousands of investors.

Defendants told investors that EmpiresX would generate these outsized returns either through a proprietary trading “bot” or by manual trading performed by Nicholas.

These statements were lies. In reality, the bot was fake.

As for the purported manual trading, EmpiresX traded only a fraction of the funds it took from investors, and that limited trading failed to earn anywhere near the touted returns.

Instead, Pires and Goncalves misappropriated large sums of investors’ money for personal uses such as luxury cars, real estate, and travel.

On the money side of things, Pires and Goncalves are being held jointly liable for $32,178,070 in disgorgement and $2,661,610 in prejudgment interest.

Pires has been ordered to pay a $6 million civil penalty. Goncalves’ civil penalty is $5 million.

The SEC has also secured a permanent injunction.

Because of their egregious conduct involving the fraudulent offers and sales of unregistered securities, the Court also enjoins Pires and Goncalves from soliciting any new investors or accepting additional funds from existing investors and prohibiting their issuance, purchase, offer, or sale of any security (except for their own personal accounts).

Pires and Goncalves default judgment brings the SEC’s EmpiresX case to a close.

Joshua Nicholas, EmpiresX’s bogus Master Trader,
settled with the SEC for $300,026
back in April. EmpiresX, represented by a court-appointed Receiver,
settled with the SEC
last month.

In addition to the SEC’s now concluded case, the CFTC has a
parallel civil case
related to the same charges still playing out.

Pires, Goncalves and Nicholas were also
indicted on EmpiresX criminal charges
in July 2022.

Nicholas
pled guilty
and was
sentenced to 51 months in prison
in November 2022.

Pires and Goncalves remain wanted fugitives hiding out in Brazil.

🤖 Quick Answer

What was the outcome of the SEC case against EmpiresX co-founders?
Emerson Pires and Flavio Goncalves received a $45.8 million judgment in their SEC fraud case. Following their failure to respond to the SEC's complaint, a default judgment was entered against them on April 20, 2023, resulting in admitted liability for operating a $40 million Ponzi scheme that defrauded thousands of investors within two years.

When did the SEC initially take legal action against the EmpiresX founders?
The SEC sued Emerson Pires and Flavio Goncalves in June 2022, alleging that EmpiresX operated as a $40 million Ponzi scheme. The defendants' failure to respond to the complaint led to a default judgment entry on April 20, 2023, and the subsequent $45.8 million

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