A Hawaii magistrate judge recommended penalties against a fraudster, Peter Szatmari who the CFTC said defrauded customers via unregistered binary options.
Binary options fraudster looking at $5.7 million penalty
On Tuesday, Magistrate Judge Kenneth J Mansfield of the Hawaii District Court signed a document of findings and recommendations. In the document, Szatmari will pay $6,258,250 in restitution with an off-set for any amount paid by the partner pursuant to the settlement. This amount equals what the victims of the binary scheme lost.
Additionally, the CFTC requests a civil monetary penalty in the amount of $5,699,508. This amount represents three times the defendant’s gain of $1,899,836.00.
About the fake binary options trading
The CFTC brought the case against Szatmari and his partner in October 2019, alleging that they “created and disseminated millions of fraudulent solicitations to convince recipients to open and fund binary options trading accounts on websites operated by unregistered, off-exchange brokers.”
According to the original complaint, Szatmari and Sechovicz approached the victims via emails, websites, professional videos, advertisements, and social media. They convinced their victims to open binary options trading account, and in many cases even to use automated trading software.
The duo also promised significant profits to the traders if they use the trading software. To back their claims, however, the alleged fraudsters used fake testimony of actors claiming to be making profits. They used the advertised software and also showed fake bank and trading accounts.
According to CFTC, Szatmari and his partner received $3.8 million for promoting this software as a flat fee for around 25,000 account openings.
In the document issued earlier this week, the Court finds that the allegations in the CFTC’s complaint are sufficiently pled. Thus “the sufficiency of the Complaint weighs in favor of default judgment.”
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