The Commodity Futures Trading Commission announced on Monday that it is filing a civil enforcement action against several binary options firms.
Yukom Communications, Linkopia Mauritius, BigOption, BinaryBook and BinaryOnline were the companies named in the case. Four Israelis – Lee Elbaz, Yaakov Cohen, Yossi Herzog and Shalom Peretz – are also being sued by the CFTC.
With the exception of Linkopia Mauritius, all of those companies were likely based in Israel too.
BigOption and Binary Online were both allegedly run by parent organisations in the Marshall Islands. But fraudsters have often used the Pacific island as a place to register their business, when in reality their operations are taking place somewhere else in the world.
The same is true of St. Vincent and the Grenadines, where BinaryBook was incorporated. The binary options company had also set up phoney offices in the UK and Anguilla.
Don’t mess with the US
In a statement, the CFTC said that it was beginning proceedings against the various firms for having “fraudulently solicited and accepted more than $103 million in connection with their binary options trading scheme[s].”
According to the regulatory authority, the companies and individuals involved were soliciting clients in the US without having any license to do so. They also told clients that their trades reflected market conditions when, in reality, they could be manipulated so that those clients always lost money.
The CFTC’s statement also notes that ‘brokers’ working at these firms lied about where they were based, prevented clients from withdrawing funds and misled clients into thinking that the broker was not trading against them.
“Our efforts to hold wrongdoers accountable do not stop at our shores,” said CFTC director of enforcement James McDonald.
“Working with our partners here in the U.S. and internationally, this enforcement action represents the CFTC’s continued commitment to rooting out fraud from our markets in all forms, protecting U.S. customers, and holding participants at all levels accountable.”
McDonald and his team launched their latest case less than a week after of wire fraud and conspiracy to commit wire fraud. She will be sentenced in December.