The Ohio-based operator of a global binary options trading scheme has been charged with fraud by U.S. authorities.
The U.S. Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Jared Davis, charging him with fraud in connection with his global binary options business, which allegedly took in at least US$10 million from clients in the U.S. and elsewhere.
The CFTC alleged that, between July 2012 and June 2016, Davis “fraudulently solicited and accepted” money from clients to trade off-exchange binary options on commodities and foreign currencies, among other things.
It also alleged that Davis defrauded customers by “failing to disclose that he effectively took the opposing position on each trade and therefore made money when customers lost money on trades,” and that he “frequently had the trading platforms manipulate the options trading software settings to increase the odds of customer losses.”
The allegations have not been proven.
Separately, the U.S. Attorney’s Office for the Northern District of Ohio charged Davis in a 22-count criminal indictment for conspiracy to commit wire fraud, conspiracy to launder money, wire fraud, money laundering, obstruction of justice, tax evasion and other crimes. Those charges also have not been proven.
In its case, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans.