CFTC Files Charges against Banc de Binary

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From the CFTC...

RELEASE: PR6602-13

June 6, 2013

CFTC Charges “Prediction Market” Proprietor Banc de Binary with Violating the CFTC’s Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed on June 5, 2013 a civil complaint in federal district court in Nevada charging Banc de Binary, Ltd. (Banc de Binary), a foreign company that held itself out as being headquartered on Wall Street, with violating the CFTC’s ban on off-exchange options trading by offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. customers. The CFTC’s complaint also charges Banc de Binary with operating as an unregistered Futures Commission Merchant (FCM).

According to the CFTC’s complaint, Banc de Binary operates an online trading website through which customers can buy or sell binary (“call” or “put”) options, predicting whether the price of a certain commodity will increase or decrease in a given time period.

Specifically, from May 2011 through March 2013, Banc de Binary operated an online trading website which allowed U.S. customers to trade options products prohibited by the CFTC’s ban on off-exchange options trading. Through its website, Banc de Binary allegedly unlawfully solicited and permitted U.S. customers to buy and sell options betting on the prices of wheat, oil, platinum, sugar, coffee, corn, foreign currency pairs, and stock indices.

The CFTC’s complaint also charges Banc de Binary with operating as an unregistered FCM from July 2011 through March 2013. Finally, the complaint alleges the company did not limit its options offerings to eligible contract participants, allowing U.S. customers to trade without requiring any information about their trading history or net worth.

David Meister, the Director of the CFTC’s Division of Enforcement, stated: “If a company wants to offer U.S. persons the opportunity to buy and sell predictions on the direction of commodity prices, the company must play by the rules or suffer the consequences. The applicable rules are on the books for good reason – to protect market participants and promote market integrity – and we will serve the public by enforcing them.”

The CFTC seeks civil monetary penalties, an injunction preventing Banc de Binary from engaging in certain commodity options activity with U.S. customers, and other remedial ancillary relief, including restitution, disgorgement, and rescission.

The CFTC acknowledges the Securities and Exchange Commission, the United Kingdom Financial Conduct Authority, and the Cyprus Securities and Exchange Commission for their assistance in the investigation of Banc de Binary.

CFTC Division of Enforcement staff members responsible for this case are David S. Slovick, Margaret Aisenbrey, Jessica Harris, Mary Lutz, Kathleen Banar, Rick Glaser, and Richard Wagner.

The CFTC today also announced the issuance of a joint CFTC and SEC Consumer Alert on fraudulent schemes involving binary options and their trading platforms. The Alert warns customers that the perpetrators of these schemes allegedly refuse to credit customer accounts, deny fund reimbursement, commit identity theft, and manipulate software to generate losing trades.


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Click here to see the original at the CFTC

FPA Copy of CFTC and SEC Consumer Alert about fraudulent schemes involving binary options

FPA Review Page for Banc de Binary
 

quicksilver

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Yep... the most interesting part was them claiming to have their office located on Wall St. which is an outright lie.

Besides Banc de Binary, other culprits include Optionrally, TraderXP and tons of new binary options brokers.
 

pikiwiki

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Drop in an ocean

Yep... the most interesting part was them claiming to have their office located on Wall St. which is an outright lie.

Besides Banc de Binary, other culprits include Optionrally, TraderXP and tons of new binary options brokers.
Including 24Option, Optionfair, Traderush, Optionbit, Opteck.... the list seems endless. Really makes you wonder about these so-called options websites like binaryoptionsdaily and many others that purport to legitimize options. This action really seems to bring the hammer down. Wonder who scatters and runs now.. with the money.
 

bodgybrothers

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Yep... the most interesting part was them claiming to have their office located on Wall St. which is an outright lie.

Besides Banc de Binary, other culprits include Optionrally, TraderXP and tons of new binary options brokers.
Yeah, what a joke. And not to mention the ones that somehow scammed a financial services license in Australia and the UK - namely Enfinium. Shut them all down, they are leaches on society.
 

arkasha

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interesting

Seems that is very comun and many do so,mostly Israeli ,Israeli connection?
As soon as i read this post without looking at the poster, i said to my self this has to be a Muslim saying this, and what do you know, when i looked at the name! Ali Marub, and here we go if something hapened anywhere in the world, its the Israelis! Such an ignorance!!!
 

Pharaoh

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Let's not turn this into an ethnicity issue.

It is a simple fact that a large number of binary options brokers are operated out of Israel. If they break the law, it doesn't matter if they are in Israel or not.
 

quicksilver

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As soon as i read this post without looking at the poster, i said to my self this has to be a Muslim saying this, and what do you know, when i looked at the name! Ali Marub, and here we go if something hapened anywhere in the world, its the Israelis! Such an ignorance!!!
I'm not a muslim, but yes, when one mentions binary options, its 80% based out of Israel... as Pharaoh mentioned, let's not make this thread political.

Staying on course... Forexmagnates published an article on this developing scenario.

What I find very interesting is this:

A representative of the company explained to Forex Magnates today that Banc de Binary categorically does not accept clients from the United States.
At Tradologic we currently have a policy under which our brands don’t operate in the United States. It is clearly stated in the company policy not to offer our platform in jurisdictions where it is contrary to regulations
I suppose, now a days PR commentary is filled with more and more BS than anything else. And its not just Tradologic but also other software providers that just don't give a damn.. I think for 50k to 100k anyone can get a white label binary option... set up office in BVI or Seychelles and solicit customer funds. And if one really wanted to do due diligence they would have taken more strict steps.. Its like the pot calling the kettle black.

Its no wonder why we have scums like Cititrader, bbinary and more rotten apples of the likes. I do hope the CFTC makes an example of one of these gambling bucket shops to send a stern warning to the rest.
 

Pharaoh

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Funny how proudly BDB displayed that Wall Street address for such a long time and now they are saying that they don't accept US traders. Too bad. Any US presence, even a virtual address used to try to make people think they are a big Wall Street company, puts them into the CFTC's line of fire.
 

binarydaily

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Same with 24option, they are not accepting US traders any more.
I guess that the US gov decide to stop all the unregulated companies from accepting US traders.
Watch out if you trading with unregulated broker from inside US - you are at risk!
 
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