GUILTY: A US Federal Court Find Two Binary Brokers Guilty of Fraud and More

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I'm very pleased to report that two more binary options brokers have been hauled into federal court by the CFTC.

In March, I reported on the charges against them. The wheels of justice are speeding up. Less than 5 months later, the court ruling has come in. They've been found guilty and ordered to pay more than $4.5 million. They've also been exposed for fraudulently lying about profitability, insurance against losses, and even clients' ability to withdraw funds.

Here's the CFTC Press release on these scam brokers...

RELEASE: PR7414-16

  • July 28, 2016

    Federal Court Orders Israeli Web-based Firms, Vault Options, Ltd. and Global Trader 365, to Pay More than $4.5 Million for Unlawful Off-Exchange Binary Options Trading, Fraud, and Registration Violations
    CFTC Obtains Default Judgment and Permanent Trading Ban against the Two Binary Options Trading Firms
    Washington, DCThe U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge John Z. Lee of the U.S. District Court for the Northern District of Illinois entered an Order of Final Judgment by Default (Order) that requires Defendants Vault Options, Ltd. (Vault) and Global Trader 365 (GT 365), two Israeli web-based binary options firms, to jointly and severally pay a $3 million civil monetary penalty and $1,587,731 in restitution to their defrauded customers. The Court’s Order also imposes permanent injunctions and permanent trading bans against the two entities.

    The Order, entered on July 20, 2016, and stemming from a CFTC Complaint filed on February 2, 2016 (see CFTC Complaint and Press Release 7341-16), finds that Defendants violated the Commodity Exchange Act’s ban on off-exchange options trading and off-exchange swaps trading by offering to enter into and entering into binary commodity option contracts with retail U.S. customers. The Order also finds that Defendants defrauded customers by making false representations in their solicitations and misappropriating their funds.

    The Order finds that binary options are financial products that allow customers to predict whether the price of a certain commodity, index or foreign currency “asset” will go “up” or “down” at a future date and/or time. According to the Order, neither of the Defendants was registered as a designated contract market, exempt board of trade or bona fide foreign board of trade, and the binary options transactions the Defendants offered therefore constituted unlawful off-exchange options and unlawful swaps. According to the Order, Defendants nonetheless solicited and accepted at least $1.6 million from U.S. customers from 22 states for the purpose of entering into these unlawful off-exchange binary options contracts.

    The Order further finds that Defendants defrauded their customers by, among other acts and practices, knowingly or recklessly claiming that customers can make large profits, when, in fact, many Vault and GT 365 customers quickly lose most of their funds trading Defendants’ binary options. The Order further finds that Defendants falsely represented to customers that their funds were insured against losses, failed to respond to customer inquiries about the status of their funds, and ultimately misappropriated the customers’ funds.

    The Order also finds that Defendants operated as unregistered Futures Commission Merchants by soliciting and accepting binary options orders and funds from U.S. customers and by confirming the execution of such orders.

    The CFTC cautions victims that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

    The CFTC’s Enforcement Division also appreciates the assistance of the Israeli Securities Authority, the Cyprus Securities and Exchange Commission, and the Ontario Securities Commission.

    CFTC Division of Enforcement staff members responsible for this action are Camille Arnold, Heather Dasso, Mary Elizabeth Spear, Mary Lutz, Joseph Konizeski, Scott R. Williamson, and Rosemary Hollinger.

Original CFTC Press Release

FPA Review Page for Vault Options

FPA Review Page for Global Trader 365
 
I bet all the binary option brokers would be found guilty of fraud, if a detailed investigation is done by regulatory organizations across the globe.

Wanna bet? Then lets's all go to Las Vegas where the drinks are free and the food is too good to be true... otherwise whos's got your back?

Awesome kudos, well done! Justice is served:

Judge John Z. Lee of the U.S. District Court for the Northern District of Illinois

Gotta love the dream team @CFTC, go team go!

Best regards to the brave souls who dare to dream of decent return on investments, no matter how difficult it is these days.
 
I bet all the binary option brokers would be found guilty of fraud, if a detailed investigation is done by regulatory organizations across the globe.
There should be more accountability for all brokers , if any person went out and robbed a bank they would be tried and jailed ,the world of brokers ,they robs us and get rewarded with big salaries
 
Good so! It would be nice to see the same thing with other binary scammers.
 
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This is great. I am told that in Canada for any Forex or Binary Options company to operate they must hold the customer's funds in trust by law or they cannot operate. If a dispute arises or if a company becomes insolvent, the funds are there to be returned to the customers. The USA, UK and other countries should require the same thing. This would eliminate the wild and impossible offers to customers. Also, if a company does not have funds in trust to reimburse customers, the principles of a company as well as the broker involved should receive a jail sentence. This is no different than robbing you at gun point. Because it is a "paper" robbery does not make it any different. People's life savings are taken in a "paper" robbery. At least when you are mugged all they get is what is in your wallet. Your family does not suffer the loss of everything they worked for.
 
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