The US Commodity Futures Trading Commission (CFTC) today announced that a federal court in Las Vegas, Nevada, issued a Consent Order requiring Defendants
Oren Shabat Laurent of Israel and his companies ET Binary Options, of Israel, Banc de Binary of Cyprus, BO Systems of the Seychelles, and BDB Services of the Seychelles (collectively, Banc de Binary) are to pay USD7.1 million in restitution to US customers who traded illegal, off-exchange binary options offered by the defendants.
The Defendants have also been ordered to pay a USD2 million civil monetary penalty and hit with a permanent ban on offering or trading any further off-exchange binary options to US customers.
A CFTC complaint filed on 5 June, 2013, and amended on 6 May, 2014m charged the Defendants with violating the Commission’s ban on off-exchange options trading by offering commodity option contracts to US customers for trading, as well as soliciting, accepting orders and funds from, or confirming the execution of orders from US customers.
Through the Banc de Binary website, customers buy or sell binary “call” or “put” options that allow them to predict whether the price of a certain “asset” will go “up” or “down” at a future date and/or time, with a specified payout structure.
In the Order, the Court found that the corporate Defendants acted as the counterparty to their customers’ binary options transactions on a variety of assets, including commodities (e.g., wheat, oil, gold, platinum, sugar, coffee, corn, etc), forex pairs (eg, EUR/USD, GBP/USD, USD/JPY, etc), and stock indices (eg, S&P 500 and NASDAQ futures).
The Court further found that the Defendants’ customers were not eligible contract participants (ie, the Defendants’ customers were retail customers). These transactions, the Court found, violated federal laws prohibiting the trading of options off-exchange.
