The US Securities and Exchange Commission has imposed more than $ 60 million in fines and penalties on three US-based binary options traders. Why does SEC fine binary option marketers?
31 December, 2019 | AtoZ Markets – SEC fines binary option affiliate marketers with $ 60 million. They are Timothy Atkinson, his former trading partner, Jay Passerino, and their company “All in Publishing.” They have been accused of marketing fraudulent binary options to American customers on behalf of their associate brokers.
Why does SEC Fine Binary Option Marketers?
The SEC announced today the final judgment by a federal court in Florida against the two affiliates, and another trader named Michael Wright. He helped and encouraged fraud.
The complaints allege that the fraud scheme existed from at least 2013 until July 2017. And it was a fraudulent advertising campaign which relied on other traders (affiliates) to promote the trading systems and websites. They lured their victims by sending false statements to trading platforms, also paying video producers to make fraudulent testimonies promoting the trading systems.
The SEC describes the defendants’ ads as “pure fiction”. But the people in the videos told viewers that they “enjoyed a rich lifestyle by trading in binary options.” And they claimed to show them that their trading balances automatically increase in live accounts. The penalties, in this case, are the most severe that US authorities have imposed on binary options traders so far.
How much will they Pay Civil Penalty?
The three defendants have agreed to settle with the SEC, without admitting or denying the allegations in the lawsuit. And they will collectively pay a total of $ 61.5 million for their ill-gotten gains, interest and penalties.
According to the SEC statement, Atkinson and All in Publishing will pay “disgorgement of $27,208,987 in ill-gotten gains and $2,824,935 in pre-judgment interest.” And both have also agreed to pay a civil penalty $ 27,208,987.
SEC orders Mr Passerino to pay $ 1,894,991 for scam gains, $ 220,431 in pre-trial interest and a civil penalty of $ 1,894,991. The SEC added Michael Wright had to pay $ 266,353 to settle outstanding claims.
The CFTC has also filed complaints in federal district courts in Florida against the defendants. It is for flooding the Internet with false and misleading representations for their quick-win schemes.
Regulators said people had viewed the promotional content produced by these scammers millions of times. And it has prompted more than 50,000 people to open binary options accounts with their unregulated brokers. Because they didn’t register as a designated contract market. That is an exempt board of trade or bona fide foreign board of trade. According to the court order, the binary options deal they offered “constituted unlawful off-exchange options.“
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