The Securities and Exchange Commission today announced that it received a Washington federal judge’s blessing to fine two Israeli men for operating a binary options scam that defrauded more than 2,800 US investors to the tune of $5 million.
The two defendants were named as Anton Senderov and Lior Babazara, who owned and controlled two binary options brands, and Ivory Option. Until recently, those two sites were operated from offices of LianTech Finance Marketing, Ltd in Ramat Gan.
The SEC said the brokers operated a call center in Israel that functioned as a “boiler room,” a type of fraud that involves cold calling potential investors offering to sell them exotic financial products.
The two men were ordered by Judge Rosanna Malouf Peterson to jointly disgorge $560,773.00 in illegal profits they collected from the scheme’s victims. Further, the court hit Anton Senderov, 34, and Lior Babazara, 37, with a civil penalty totaling $350,000.
The order also bars the defendants from the securities industry, in particular selling any binary options products in the future.
Lbinary was promoted by Michael Shah
The SEC’s complaint, which was filed in federal district court in the Eastern District of Washington, describes how most investors lost money, with some losing their entire savings after the brokers’ staff used fraudulent statements to induce them to invest. The regulator also said the defendants usually refused to allow these clients to withdraw their money.
The alleged binary options fraud took place from January 2014 through August 2017. As was customary, lied about their names, location, titles, experience, and the fact that they made profits when the traders lost their balance.
The two brands were mentioned earlier this year when the CFTC hit a binary options operator with over $22 million penalties for defrauding his American victims through numerous websites. A Florida federal court fined online advertiser and his company Zilmil, Inc. Shah, who worked in tandem with call centers in Israel in return for large commissions, sent traffic to binary options sites including LBinary, TraderXP, Trade Rush, Banc de Binary, and OptionRally.