U.S. authorities have settled with a binary options firm in connection with alleged unregistered trading. The settlement is designed to see millions of dollars returned to harmed investors. Yet, regulators also warn that fraudsters may be further targeting victims in the case with an advance fee scheme.
The U.S. Securities and Exchange Commission (SEC) announced that Cyprus-based Banc de Binary Ltd. has agreed to pay US$11 million to settle charges that it illegally sold binary options to U.S. investors. The money is to be distributed to harmed investors under a court-sanctioned arrangement that was approved by the U.S. District Court for the District of Nevada.
The court has established a fund that will be administered by the U.S. National Futures Association (NFA) to compensate investors in the case. Today, the SEC also warned that fraudsters claiming to be affiliated with the SEC, or other government agencies, have been contacting harmed investors in this case, seeking a fee to facilitate their settlement payout.
Under the agreement, Banc de Binary, its founder, Oren Shabat Laurent, and affiliates, agreed to jointly pay US$7.1 million in disgorgement and US$1.95 million in penalties to the SEC, and US$2 million in penalties to the U.S. Commodity Futures Trading Commission (CFTC), which filed a parallel action. They also agreed to be suspended from the securities industry for a year and to be permanently barred from issuing any penny stock offerings.
The deal follows a complaint filed against the firm, its founder, and various affiliates, by the SEC in 2013, alleging that they failed to register before soliciting U.S. investors.
The Ontario Securities Commission (OSC) issued an investor warning about Banc de Binary back in 2012. Various Canadian regulators have also issued warnings about so-called binary options trading platforms over the past couple of years.