July 29, AtoZForex – The US Commodity Futures Trading Commission (CFTC) has been very successful in actively targeting firms and individuals related to frauds and illegal trading activities. Just yesterday, the regulator has issued a penalty over $4 million on binary options brokers Vault Options and Global Trader 365.
CFTC fines Binary Options brokers Vault Options and GT 365
The Order stems from the time when CFTC has announced a civil complaint filed against two Israeli web-based binary options firms, Vault Options, Ltd. (Vault) and Global Trader 365 (GT 365) earlier this year.
The official document from CFTC states:
“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.”
Additionally, the Court imposes permanent injunctions and trading bans against both brokers. Apparently, the Order, which was entered on July 20, 2016, finds that Defendants have breached 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.”
Binary options brokers were misappropriating clients' funds
Moreover, the Order also finds that Defendants misled customers by making false representations in their solicitations and misappropriating their funds. Following on this, the Order also finds that 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.”
However, the accused firms solicited and accepted at least $1.6 million from US investors from 22 states. Furthermore, the Order finds that Defendants misled their clients by promising large profits. As a result, many of Vault’s and GT 365’s customers quickly lost their funds trading Defendants’ binary options.
As CFTC fines Binary Options brokers, additionally, the Order finds that Defendants were falsely representing to clients that their funds were insured against losses. Also, Vault Options and Global Trader 365 have failed to respond to client questions about the status of their funds and misappropriated the clients’ funds.
AtoZForex has tried to contact both of the Binary Options brokers, but their websites seem to be not operational.
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