The operators of a global binary options scheme that defrauded investors have been ordered to pay US$450 million in restitution and penalties by a U.S. district court.<\/p>\n
Back in 2019, the U.S. Commodity Futures Trading Commission (CFTC) filed suit against a collection of offshore, unregistered companies; WSB Investments Ltd. (BinaryBook), which was incorporated in the U.K. and other jurisdictions; and a handful of Israeli citizens, alleging that they breached U.S. derivatives rules and defrauded investors. The offshore, unregistered companies included Israel-based Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Ltd. and Zolarex Ltd., which were based in the Marshall Islands (and operated as BigOption and BinaryOnline, respectively).<\/p>\n
Now, a U.S. district court judge in the Northern District of Illinois has issued a default judgment against them, finding them liable for fraud and various regulatory violations in connection with an online binary options scheme that, the CFTC alleged, solicited investors to trade illegal, off-exchange binary options, between March 2014 and August 2019.<\/p>\n
According to the court’s order, the companies “made numerous fraudulent misrepresentations” to investors, including claims that “binary option transactions were profitable, when in fact the substantial majority of their customers lost money…”<\/p>\n
The court also found that they misappropriated customer funds and made misrepresentations to investors to discourage them from withdrawing their funds.<\/p>\n
And, it found that the manipulated the trading platform\u2019s risk settings, “to limit or prevent customers from being ‘in the money’ with winning trades.”<\/p>\n
According to the order, there was no distinction between the various companies’ brands, they shared office space and employees, and co-mingled investors’ funds.<\/p>\n
The court ordered the defendants to pay US$112.9 million in restitution and a US$338.7-million civil monetary penalty. It also permanently banned them from the markets.<\/p>\n
In a parallel criminal action, one of the scheme’s alleged masterminds was convicted of wire fraud and conspiracy to commit wire fraud back in 2019. She was sentenced to 20 years in prison, and ordered to pay US$28 million in restitution.<\/p>\n
One of her co-defendants pled guilty to a conspiracy charge, and was sentenced to five and a half years in prison and ordered to pay US$7 million in restitution.<\/p>\n","protected":false},"excerpt":{"rendered":"
U.S. district court issues default judgment in global scheme<\/p>\n","protected":false},"author":147314,"featured_media":474375,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2324],"tags":[2443,2355,2508,2370,2776,2460,2858],"yst_prominent_words":[4996,49743,40080,27736,16690,16498,10092,9313,9309,6459],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/501364"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/147314"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=501364"}],"version-history":[{"count":4,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/501364\/revisions"}],"predecessor-version":[{"id":501391,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/501364\/revisions\/501391"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/474375"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=501364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=501364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=501364"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=501364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}