Banc de Binary Ltd. has settled a fraud lawsuit by the Commodity Futures Trading Commission and the SEC accusing the Cypriot financial trading company of illegally signing American investors to join its binary options trading program. According to the regulators, from 2011 and 2013, Banc de Binary pursued and took orders from U.S. customers on contracts connected to currency, commodity, and stock prices. By doing this, the company purportedly got around a ban in the US that prohibited off-exchange binary option contracts and received net deposits of $11M from over 6,000 U.S. customers
As part of the settlement, the financial trading company has agreed to pay $7.1M in disgorgement and restitution and $2M in penalties to the CFTC. It will pay the SEC $1.95M in civil penalties. $9.05M of the settlement will go toward paying back the U.S. customers who suffered harm in this matter. Oren Laurent, who is the founder of Banc de Binary, will pay $150K in the settlement.
Banc de Binary is considered the biggest binary options operator. Binary options offer all or nothing payouts according to price moves. They remain unregulated in a lot of the world.
In an unrelated case the CFTC filed a lawsuit against a Florida company accused of illegally sending deposits to from U.S. customers to a number of offshore binary options trading platforms.
The defendants, Neil Pecker and his Vision Financial Partners LLC, are accused of fraudulently soliciting close to $3M from 120 U.S. and Canadian citizens to trade off-exchange binary options. They purportedly did this through false and misleading misrepresentations and omissions of material facts. They also allegedly misappropriated nearly $2M of client monies for personal spending.
Cyprus Firm, Founder to Pay $11M to SEC, CFTC Over Binary Options Sales, Think Advisor, March 9, 2016
Read the SEC Complaint (PDF)
CFTC Charges Florida Resident Neil Pecker and His Company, Vision Financial Partners, LLC, with Fraud in Connection with Off-Exchange Binary Options and Registration Violations, CFTC, February 24, 2016