Federal Court rules on CFTC and SEC charges against Banc de Binary

AsstModerator

FPA Forums and Reviews Admin
Messages
5,590
In 2013, the CFTC filed charges against Banc de Binary. In 2014. additional charges were filed, including charges directed at Oren Shabat Laurent, the CEO of the companies. The SEC filed charges in parallel with the CFTC.

The wheels of justice turn slowly, but they do turn. In January, 2016, Cysec fined Banc de Binary €350,000, which is apparently the maximum penalty which Cysec can impose. The FPA is still eagerly awaiting word of any rulings by the Cyprus Financial Ombudsman. Earlier today, the CFTC finally issues a press release detailing their legal victory over Banc de Binary.

First, the company must pay $7.1 million in restitution to US customers. Second, there is a penalty of $2 million against the defendants, including the companies involved as well as the CEO.

Here's the full text of the CFTC Press Release...

RELEASE: PR7336-16

March 9, 2016

Federal Court Orders Banc de Binary Ltd., ET Binary Options Ltd., BO Systems Ltd., BDB Services Ltd., and Oren Shabat Laurent to Pay More than $9 Million in Restitution and a Civil Monetary Penalty for Violating the CFTC’s Ban on Trading Binary Options Off-Exchange

Washington, DC – The U.S. 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 E.T. Binary Options, Ltd. of Israel, Banc de Binary, Ltd. of Cyprus, BO Systems, Ltd. of the Seychelles, and BDB Services, Ltd. of the Seychelles (collectively, Banc de Binary) to pay $7.1 million in restitution to U.S. customers who traded the illegal, off-exchange options (in this case, binary options) offered by the Defendants. The Defendants were also ordered to pay a $2 million civil monetary penalty. The Order also imposed a permanent ban on offering or trading any further off-exchange binary options to U.S. customers.

The Order, entered on February 26, 2016, stems from a CFTC complaint filed June 5, 2013 (see CFTC Press Release 6602-13) and amended May 6, 2014 (see CFTC Press Release 6923-14), charging the Defendants 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 orders and funds from, or confirming the execution of orders from U.S. 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 (e.g., EUR/USD, GBP/USD, USD/JPY, etc.), and stock indices (e.g., S&P 500 and NASDAQ futures). The Court further found that the Defendants’ customers were not eligible contract participants (i.e., the Defendants’ customers were retail customers). These transactions, the Court found, violated federal laws prohibiting the trading of options off-exchange.

In a parallel action, the U.S. Securities and Exchange Commission (SEC) also resolved its pending litigation against the Defendants. SEC v. Banc de Binary, Ltd., et. al., 2:13-cv-00993-RCJ-VCF. As a result of the CFTC and SEC Orders, the Defendants are required to pay more than $9 Million to U.S. customers.

The CFTC thanks the SEC in this matter for its cooperation. The CFTC also thanks the Cyprus Securities and Exchange Commission, Israel Securities Authority, Ontario Securities Commission, Swiss Financial Market Supervisory Authority, and the U.K. Financial Conduct Authority for their assistance in this matter.

CFTC staff members responsible for this case are Margaret Aisenbrey, Kim Bruno, Michelle Bougas, Erica Bodin, Jessica Harris, Nate Gueltzau, Joyce Brandt, Mary Lutz, Tom Leahy, Duane Andresen, Kathleen Banar, and Rick Glaser.

Monitor Contact Information

The CFTC has posted on its website information regarding the restitution distribution process (see the CFTC’s Banc De Binary Litigation Case Study Report). In addition, the court-appointed Monitor, the National Futures Association, will post information and current updates regarding the case on its website (see NFA’s Banc De Binary Restitution Information).

The CFTC cautions customers that restitution orders may not result in the recovery of 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.

* * * * * * * * *

See CFTC’s “RED” List Information

CFTC Press Release 7224-15, September 9, 2015: CFTC Publishes List of Foreign Entities that Illegally Solicit U.S. Residents to Trade Foreign Currency and Binary Options; The New Registration Deficient ‘RED List’ Identifies Companies Operating Illegally.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

Media Contact
Dennis Holden
202-418-5088

* * * * * * * *

This closes one chapter in Banc de Binary's legal problems. I think there will be more to follow.

Link to this CFTC Press Release

US clients of BDB need to contact the NFA about restitution

Banc de Binary Reviews at the FPA
 

feaisland55

Corporal
Messages
109
There is justice in the world, I guess. Hard to believe all these s-l-o-w agencies were able to act! Hopefully Banc de Binary will not have hidden its assets in Bora Bora National Bank. Bravo!--feaisland55
 

ElaineMDG

Corporal
Messages
119
One down, probably thousands to go!! It IS, however, sad, that these wheels of justice turn SO slowly; especially with the seemingly endless list of people being scammed of their hard-earned money. As in so many things like this, it's usually the people who can least afford to be scammed; who end up losing everything. Unfortunately, these folks are also less likely to be able to afford the legal representation required to try and push those wheels of justice just a bit faster-OR file civil suits.
In this day and age, with more people deciding to try their luck in the financial markets and with the digital revolution making trading at home possible; it seems like this field has become the most popular, fertile ground for scammers looking for their next vulnerable victim. It's a shame there isn't some way to warn people who are looking to pursue trading as a career or just passive income, to RESEARCH these companies before parting with a single dime!!

As I've said before, perhaps it's my age, or just the fact I've been ripped off a few too many times in my life; but I've been approaching EVERYTHING, from my education, "coaches" brokers, etc, with an extremely cautious hesitancy. Call me "paranoid", (my kids do ;)); but I've "given away" far too much in my past, AND this means too much to me at this point in my life. I'm so VERY grateful to Bill and all the folks here at FPA. Lol, it should be a "required" portal to the world of Forex!
 

highloss

Private, 1st Class
Messages
33
GREATfor US citizens but not so great as there are many frauds and it goes beyond USA at much faster pace. It may deter them to lure US clients and switch to EUROPE & REST OF THE WORLD which such victories l believe do not apply. Correct me if l am wrong. Any possibility such success be implicated to clients outside USA to get legal recourse against such scammers?

Even then this is better than nothing that l really do not know if there any broker we can trust to trade.

I find absolutely dissapointed being in ASIA that we do not have any active coordinated legal front like USA and EU to represent the citizens. We are left to die & rot when we are cheated where the legal authorities do not bother.

Any advise how to get monetory recourse if we are scammed being in ASIA.
 

novatrice1

Private, 1st Class
Messages
66
Do not worry if you advance slowly, worried about you if you do more advances.
That is good news. There must be a beginning at all.
It would have various authority installs a criminal record for all to prohibit their escot
any activity on the market.
If a case anymore, they open up another and continue their unlicensed thief bisness.

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ruseneca

Master Sergeant
Messages
348
A good news will be that clients have recovered their lost funds. The US court decision is not enough. Probably, company's assets must have been frozen and sold in case of a bad scenario.

I would like to thank all FPA members that took part in scam threads and defended statements that trading binary options equals to betting. It is now proved by CFTC.
 

Dermolikesprofit

Sergeant
Messages
158
Good to hear these scammers are finally getting their just rewards,
I have always said that these binary options are nothing more than a scam, and what's worse is, that they pop up overnight and start scamming a new victims as soon as one is shut down. You would be better off going to the track to bet on horses,dogs or anything racing, at least that way you know your money is gone but you may have some fun doing it.
 
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