Famous Twitter "Trader" Arrested For Stealing $1.5 Million, Running A Ponzi

Tyler Durden's picture

With nearly 64 thousand followers, the name Randall Rye will likely be familiar to those who follow finance Twitter:

Having built up the substantial following since joining August 2011, the famous Randalph "Randy" Rye unexpectedly stopped tweeting just after the new year, with his last tweet hitting on January 5.

Why the sudden silence?

It appears that's about the time the 26-year-old Randall found out the authorities had figured out that instead of running a legitimate trading operation as he had represented to people gullible enough to give him their money, something called Faster Than Light Trading LLC, he was - allegedly  - merely the latest fraud, stealing and using up to $1.5 million in cash for his own personal expenses and engaging in the latest criminal Ponzi scheme.

Instead of using the money to trade, Randy "misappropriated the investors’ funds for his own personal expenses, such as air and hotel travel costs, including vacations to St. Lucia and Bali, tickets to sporting events, including the World Series and the Masters golf tournament, and on other luxury items and large cash withdrawals."

And, according to a DOJ indictment released last night, Randy won't be tweeting again under this account, because last month Randy was arrested and remains in federal custody. "At the time of the arrest, law enforcement searched his home and office, seizing his business records and several expensive watches."

In retrospect, Randy was a far more convincing twitterer than trader. The allegations behind his misconduct were disclosed in the full complaint filed by the US Attorney's Office for the Northern District of Illinois.

* * *

Chicago Trader Indicted on Fraud Charges for Allegedly Misappropriating at Least $1.5 Million in Client Funds

CHICAGO — A Chicago trader defrauded more than a dozen clients out of at least $1.5 million by pocketing their money instead of investing it, according to an indictment returned in federal court in Chicago.

RANDALL RYE, the owner of Faster Than Light Trading LLC, told investors that they would earn substantial profits from his proprietary trading program. Rye claimed that he would invest their money in options and futures contracts using a computer algorithm. In reality, Rye misappropriated the investors’ funds for his own personal expenses, such as air and hotel travel costs, including vacations to St. Lucia and Bali, tickets to sporting events, including the World Series and the Masters golf tournament, and on other luxury items and large cash withdrawals, according to the indictment.

As a result of the scheme, Rye fraudulently misappropriated at least $1.5 million from at least 15 investors, the indictment states.

The indictment was returned Wednesday in federal court in Chicago. It charges Rye, 26, of Chicago, with six counts of wire fraud. Arraignment is scheduled for March 21, 2017, at 1:15 p.m., before U.S. Magistrate Judge Michael T. Mason in Chicago.

According to the indictment, Rye falsely represented to investors that their money was generating substantial returns from his purported algorithmic trading program. Rye sent his investors numerous false account statements that appeared to be from established financial services companies, stating that all of the investors’ principal and profits were invested and profitable, the indictment states. However, Rye knew when he prepared the bogus statements that the documents were false and that investors’ funds were not actually maintained at the financial services companies.

Rye also used newer investors’ funds to make Ponzi-type payments to earlier investors.

Rye was arrested last month and he remains in federal custody. At the time of the arrest, law enforcement searched his home and office, seizing his business records and several expensive watches.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Each count of wire fraud carries a maximum penalty of 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

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Pinto Currency's picture

Arrest the FOMC - that's a real Ponzi.

nope-1004's picture

This guy made his mistake by doing it while not under the umbrella of being employed at GS or JPM.

There's legalized ponzi's and there's illegal ponzi's.

Some kids will never learn......

NoDecaf's picture

Was he making 7k a month in his mom's basement?

Logan 5's picture
Logan 5 (not verified) NoDecaf Mar 17, 2017 12:38 PM

Yeah but he was spending $70k a month

InjectTheVenom's picture

and Goldman Sachs HR department calling to interview Mr Rye in 3 ... 2 ... 1  .  .  .

zagzig's picture

Now known as Government Sachs

Sanity Bear's picture

They'd better call quick; pretty boy like that isn't going to do well in the federal pen.

buzzkillb's picture

Should have IPO'd as SNAPAZON and become a billionaire instead.

knukles's picture

OK, so he perpetrated the crime over Twitter and they let it pass as factual news and information
Twitter owes the people whoi got had.
They didn't knock off the misguided, the thieves and miscreants, they did not do their job of censoring adverse communications.

Hold Twitter Responsible

Joe Davola's picture

Github turned up this for the pseudo-code of his algorithm:

 

Pay me

Fuck you

curbjob's picture

Lol $1.5  millivanilli , what's that ? a tofu and truffle burger with a side of hungarian orphan livers at Davos ??

Bitch is going to jail. 

Handful of Dust's picture

He's simply building his resume for Goldman Sucks job.

 

Besides, he had no intent...was merely reckless so he goes free. Plus, he was only dealing with money not something of national security importance like Top Secret Classified material where he would go to jail for life.

E.F. Mutton's picture

At least he'll be popular in prison.  I bet he goes for at least 4 packs of smokes.

Logan 5's picture
Logan 5 (not verified) E.F. Mutton Mar 17, 2017 1:12 PM

mackerel (haven't you been paying attention)?

zagzig's picture

He'll be learning to get in touch with his feminine side ...

zagzig's picture

He'll be learning to get in touch with his feminine side ...

Lumberjack's picture

But...but...but Jon Corzine...

August's picture

Sociopaths in the FIRE industry. Who knew!

SILVERGEDDON's picture

Hey, is this the infamous Shitwave link pimp ?

silverer's picture

Ask MillionDollarBogus who this guy voted for.

HenryKissingerChurchill's picture

Randy "misappropriated the investors’ funds for his own personal expenses, such as air and hotel travel costs, including vacations to St. Lucia and Bali, tickets to sporting events, including the World Series and the Masters golf tournament, and on other luxury items and large cash withdrawals."

Isn't that EXACTLY what every banker does?

NoPension's picture

He just cut out the middlemen.

Free Jon Corzine.

Bastiat's picture

He was using a disruptive Balance Sheet hack to jack his Income Statement.

Smedley's picture

He wasn't a Tribe member.....

HenryKissingerChurchill's picture

He wasn't a Tribe member.....

oh then, he made a mistake: he was born goyim cattle.

HowdyDoody's picture

It doesn't matter who he is. The important thing is (((who))) was fleeced e.g. by Madoff.

mily's picture

Shlepwave next?

Condition 1SQ's picture

Haha, exactly.  Where are the Sheepwave shills?

NoDecaf's picture

A) waiting for his next batch of ZH usernames to be approved.

B) trolling some other website

C) welcoming his new sucker, I mean account, into the sheepwave juggernaut complex.

or ...D all of the above

Mr Perspective's picture

This guy is any different than any other high profile trader? He must have threatened some other scammer's business. Gotta take out the competition, right?

insanelysane's picture

I wouldn't trust a 26 year old to walk my dog.  Who the fuck is giving a 26 year old money to invest?

813kml's picture

It's Twitter, his crowd probably already forgot they lost money.

Should have used Snap instead to avoid paper trail.

TheGardener's picture

15 fools out of 64,000 followers

Panic Mode's picture

His investors are probably some 16 years created some useless toss apps. So 26 years old to them are veteran investors.

venturen's picture

My Trader friends are away taking their clients and sell side staff on luxury outing...how does this differ?

Fizzy Head's picture

Quote of the day.."There's a sucker born every minute"..

Logan 5's picture
Logan 5 (not verified) Fizzy Head Mar 17, 2017 12:41 PM

TRY.NOT.TO.SUCK.

~Joe Maddon

Panic Mode's picture

GoFundMe.com. Rings the bell?

Robert Trip's picture

Big bubba is awaiting your arrival Randy to take you under his wing and "protect" you.

Enjoy.

wmbz's picture

Poor Randy Small Fry. They love burning the miggets in a Ponzi.

While the big dogs at Banksters Inc. lie, cheat and steal day in and day out.

Dragon HAwk's picture

Shocked Shocked I tell you, why i was almost ready to send him a 5 Million dollar rubber check.  saw a wright up on that dude a while back and said yeah right cannon fodder 3,2,1

SmilinJoeFizzion's picture

He's a good looking lad- he should have his corn creamed nightly in the clink

barysenter's picture

Not. He'll be protected by his future employers, who are on ice with him. His career is just beginning.

crghill's picture

1.5 million....You gotta pump those numbers up, those are rookie numbers.  

www.lowloadgold.com

Captain Sensible's picture

They are small compared to Madoff and Corzine granted, but when you consider he is a jumped up twat with a twitter account, it's still staggering that he can raise that much from his moms basement"!

HoserF16's picture

Next CEO of Goldman Sach's

Captain Sensible's picture

I have been a trader for 20 years and a prop trader for 12 years. It is a consistent battle to perform and innovate consistently.  I never understand how these people convince strangers to give them their money. I started with fuck all and built an account, so I didn't have to ask for or manage any assholes money. 

 

These fucking twiiter kids manage to convince grown ups to give them millions.  I don't have sympathy for those investors, people are fucking stupid they never back the right people anyway.  It would take me 1 minute to suss out that fraud in a meeting.