U.S. derivatives regulators have charged a Florida-based firm with fraud in connection with a binary options trading scheme that allegedly targeted investors in Canada and the U.S.
The U.S. Commodity Futures Trading Commission (CFTC) on Wednesday announced the filing of a civil enforcement complaint charging Vision Financial Partners, LLC of Deerfield Beach, Fla. and its owner, Neil Pecker, with fraud and acting as a commodity trading advisor without being registered.
The CFTC alleges that the firm fraudulently solicited US$3 million from 120 clients in Canada and the U.S. to trade off-exchange binary options. The U.S. regulator also alleges the defendants misappropriated almost US$2 million of client funds. The allegations have not been proven.
U.S. district court judge James Cohn granted a statutory injunction freezing the assets of Pecker and Vision, the CFTC says, prohibiting them from destroying their books and records, and granting the CFTC immediate access to those records.
The regulator is seeking restitution to defrauded clients, disgorgement of ill-gotten gains, civil monetary penalties, and permanent registration and trading bans.
The CFTC indicates its investigation was aided by several Canadian regulators, including the authorities in Ontario, Alberta, British Columbia, and New Brunswick; along with regulators in the UK, the Cayman Islands, the British Virgin Islands, Cyprus, and St. Vincent and the Grenadines.
Regulators in Canada have repeatedly issued warnings about trading in binary options, with are high risk, and particularly when they involve offshore accounts can be vulnerable to fraud.