Velez Capital Management (Team Trading)-Velez and Vacarro
Complaint 26134 Details

I entered into an agreement with Velez Capital Management LLC (VCM – now Team Trading LLC I believe) in May of 2008. I wired $5,100 of risk capital to VCM May 9, 2008, and received confirmation that these funds were received May 15, 2008. In return I was to receive margin of 20 to 1, daily access to the VCM proprietary trading room and a commission rate of $0.0045 per share plus all ECN and SEC pass through fees minus rebates. I also paid $50 per month to use the Orbis trading platform provided by VCM (data fees were included in this monthly cost).

On September 16, 2008, I paid $1,995 for the two day VCM training seminar conducted via webinar. This entitled me to the two day seminar with “free” retakes for “life” and a hardback copy of the slides used during the seminar.

On March 12, 2010, trading via the VCM platform was abruptly and without any communication terminated. After much research into the situation, VCM technical support said that the platform vendor (Orbis) had disabled the ECN routes and the problem was temporary. After further questioning of Orbis, the traders were told that Mr. Charles Vaccaro instructed Orbis to disable all trading routes (ECN routes) so trading could not be conducted using the VCM platform.

March 15, 2010, I received an email from Mr. Vaccaro offering a bogus (in my opinion) explanation for the shutdown and indicated Equity trading would resume Wednesday, March 17, 2010. I tried to log into the proprietary trading room the morning of March 17 and found my login had been disabled, again without any notification/communication. I attempted to contact VCM technical service via email and telephone and received no response. I have tried on several occasions since to login to the trading room and the VCM/Team Trading website to retrieve account information only to find that my login continued to be disabled and still no explanation. I don’t recall exactly when it happened but on another attempt to login I found the web site had been shutdown and a note was posted saying “Services and Training cancelled until further notice”.

March 18, 2010, I sent emails to Fred Amato (my contact at VCM), support at Team Trading, and Mr. Charles Vaccaro requesting they honor the agreement and return my risk capital per the agreement since VCM/Team Trading was no longer providing the services they agreed to provide (access to the proprietary trading room, trading risk capital, a trading platform and free lifetime retakes of the two day trading seminar). I also tried to contact these people via telephone. To date I have had zero contact from anyone at VCM/Team Trading.

Coincident with these happenings I was contacted via email by Oliver Velez regarding a new trading opportunity he is trying to establish because his partner (Mr. Vaccaro – I was not aware he was a partner until just recently), according to Mr. Velez, was trying to take his business and ruin his (Velez’s) name. I have been monitoring the new Oliver Velez trading room and it seems he is trying to establish a similar, if not an exact duplicate, trading scheme starting with new money (probably some of my risk capital that hasn’t been returned). Rather than honoring the agreement I have with VCM, Mr. Velez appears to have decided to totally abandon what he calls “independent traders” because in his view he had nothing to do with them in the business he established as Velez Capital Management. Obviously there is a problem there (funds missing and services not being provided) so Mr. Velez is trying to distance himself from the problem by disassociating and claiming to have had nothing to do with the business or just plain lack of knowledge of what was going on. If I were a 50% I can assure you I would know what was going on in every aspect of the business especially if “my” money was being used (traded in this case). At this point I seriously believe that VCM/Team Trading collected my risk capital as unregistered broker-dealers and have likely embezzled these funds.

I have tried to contact Mr. Velez via his new email address (the email address for the new business) but my emails have gone unanswered. Again, Mr. Velez has taken the position he is selling in his chat room, “I (Velez) had no knowledge of what was going on and was never involved with the independent traders’ that was all on Charlie Vaccaro” and consequently has apparently decided to ignore my request to have my funds returned. Nevertheless he is selling a new scheme that he is billing as “legal” versus what he and his partner were selling/doing before they shutdown.

I also learned who the company was that compiled the trading account information and contacted them directly to obtain my records since I could not get them through normal channels. I was told by them (Oleg Barshay of Barshay Software) that Team Trading gave them explicit instruction to disable access to account information and not give any information out without their permission.

I sent the following to the New York Attorney's General Office:

September 10, 2010

James Gallo
Investor Protection and Securities Bureau
New York State Office of the Attorney General
120 Broadway, 23rd Floor
New York, NY 10271

Re: Velez Capital Management, LLC/ Team Trading
Ref. No.: 10/000593
Initial Complaint Dated May 15, 2010, and
Follow Up Dated June 16, 2010

Dear Mr. Gallo:

Several months have passed since I filed my initial complaint regarding Velez Capital Management/Team Trading misappropriating risk capital I deposited with their firm for the purpose of trading equities (May 15, 2010, complaint). I followed up on that complaint providing information published by Mr. Velez indicating he and his partner owed over 550 traders capital totaling somewhere between $1.4 and $3.2 million dollars. To date I have seen no indication that anything has been done by the office of the New York Attorney General or the SEC to recover that money or even restrict or curtail the activities of either of these individuals.

Mr. Velez and Mr. Vaccaro closed the doors of Velez Capital Management/Team Trading with no notice to any of the traders and failed to return the risk capital of the traders. Mr. Vaccaro has accused Mr. Velez of stealing the money from the company and Mr. Velez has countered by saying he had every right to use the money as he pleased. There is no doubt the money was spent by Mr. Velez and Mr. Vaccaro; neither are denying that fact but both are saying the money is gone and that is that, end of story. Both individuals continue to live their lavish lives as if nothing has happened; their lifestyles have not been altered while that of many of the traders that had their money stolen have had to make significant changes to their lifestyle to continue to live.

Furthermore, Mr. Velez and Mr. Vaccaro separately continue to promote new but essentially the same trading scams as Velez Capital Management/Team Trading using different names (Mr. Velez is promoting iFundTraders and Mr. Vaccaro is promoting Element Trading). They advertise on CNBC and have requested space for sales booths at national trade shows such as Trader’s Expo and the Money Show. Traders that have been duped by these individuals made the promoters of these trade shows aware of the complaints filed against Mr. Velez and Vaccaro and apparently the information had an impact; both were denied permission to set up a booth at the last trade show.

Mr. Velez and Mr. Vaccaro are employing a new tactic to appease the traders from which they misappropriated funds so they can continue to promote their scams via the trade shows mentioned above. They now want all the traders that are owed money to sign a release of liability agreement (Exhibit A – the exhibit is attached and marked “draft” but Mr. Velez says it is final). The agreement suggests Mr. Velez and Mr. Vaccaro have basically stolen funds from traders and now want to take steps to repay them. However, if you take the time to read the agreement you will see that it is written solely for the benefit of Mr. Velez and Mr. Vaccaro and anyone signing the agreement would be doing so under duress – Mr. Velez is holding our money hostage and there are no guarantees anyone will ever receive a dime. No one in their right mind should sign an agreement that releases any liability before receiving something of value first (money owed the traders in this case).

This suggests to me that the agreement is nothing more than another scam Mr. Velez and Mr. Vaccaro are promoting in order to minimize their liability. If people do sign the agreement, they have released Mr. Velez and Mr. Vaccaro from any past or future liability without receiving a dime. Signers of the agreement only have the word of Mr. Velez that he will repay the money.

I would be surprised if a court would honor such a one sided agreement but then again I am surprised that Mr. Velez and Mr. Vaccaro are allowed to promote a trading business, take in risk capital, spend it as if it were their own money, close the doors of the business without refunding the risk capital of the traders and then simply change the name of the company and start over again taking more money from unsuspecting traders.

How can the office of the New York Attorney General let a practice as blatantly wrong as this continue unabated? I know resources are limited but so far over 550 traders have had significant money basically stolen and another 1,400 plus traders have been promised other forms of restitution that haven’t been received. In addition to that, allowing these two individuals to continue to promote essentially the same scams using different names only affords them the opportunity to steal the funds of other traders and continue to live their lavish lifestyles unencumbered.

I sincerely hope the office of the New York Attorney General can see its way clear to look into this matter and take the appropriate action to recover the funds stolen from the 550 traders and/or take steps to terminate further activities by either Mr. Velez and Mr. Vaccaro in the securities trading business.

I stand ready to provide any information that might assist you in an investigation of these individuals.

Sincerely,