Neil Pecker and his company, Vision Financial Partners, are to pay USD6.5 million to settle US CFTC charges of fraudulent solicitation and misappropriation in connection with off-exchange binary options.
A US District Court Order requires Pecker and Vision, jointly and severally, to pay restitution to defrauded investors totalling USD2,777,130 plus a USD3.75 million civil monetary penalty.
The order also imposes permanent trading and registration bans against Pecker and Vision and prohibits them from committing further violations of the Commodity Exchange Act and CFTC Regulations.
The order also requires relief defendants Prometheus Enterprises, of Deerfield Beach, Florida, and GDCM Trust of Las Vegas, Nevada, to disgorge over USD1 million of ill-gotten funds.
The order, which arises from a CFTC enforcement anti-fraud action filed against the defendants and relief defendants on 16 February 2016, finds that Pecker and Vision fraudulently solicited approximately USD3 million from over 120 members of the public in the US and Canada to trade off-exchange binary options.
The order further finds that the defendants made misleading and false representations to prospective clients, including about defendants’ registration status and trading experience, and the likelihood of making money if they traded binary options through defendants, and the defendants failed to disclose that trading occurred through unregistered foreign or off-shore firms and that clients were prohibited from withdrawing funds from their trading account, including their own funds initially invested, unless and until the client traded at least 20 times the value of the trading account.
The order also finds that, rather than trade binary options on behalf of their clients, the defendants misappropriated almost USD2 million of client funds, and diverted client funds to relief defendants. The relief defendants did not provide any legitimate services or have any legitimate entitlement or interest to the clients’ funds, the court found.
The order also finds that Vision and Pecker acted as a Commodity Trading Advisor (CTA) and as an Associated Person of a CTA, respectively, without being registered as such with the CFTC.
The CFTC’s litigation is still continuing against the two other relief defendants charged in the action: Westward International Ltd and Coucarin Holdings, Ltd.
