US CFTC Fines Illegal Binary Options Operators TEN and Intrade $3M


US CFTC fines illegal Binary options operators TEN and Intrade $3M, according to the latest announcement on its website. The Court has found that TEN and Intrade have allowed US customers to trade 5,503 Binary Options contracts that involve CFTC-regulated commodities.

20 July, AtoZ Markets – The key financial markets regulator, the US Commodity Futures Trading Commission (CFTC) has announced that earlier this July, the Senior Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia has issued an Opinion and Order against defendants Intrade The Prediction Market Limited and Trade Exchange Network Limited (TEN).

US CFTC Fines Illegal Binary Options Operators TEN and Intrade $3M

The two defendants are Irish companies that are located in Dublin, Ireland. The order from the CFTC has obliged them to pay a $3 million civil monetary penalty for violations of the Commodity Exchange Act (CEA) and CFTC Regulations. 

Judge Lambeth has found that the defendants have repeated: 

“violations severely compromised the regulatory purpose of the CEA and [were] serious” and, therefore, those “violations of the CEA and Commission Regulations, coupled with their brazen defiance of the 2005 Commission Order, warrant[ed] a CMP of $3 million.”

The Order appears from July 31, 2015, Memorandum Opinion and Order, where Judge Lamberth has authorized the CFTC to judge on Counts I and II of a Complaint filed against Intrade and TEN on November 26, 2012.

Summary of violations

While the summary judgment was granted to the CFTC, the Court has found that TEN and Intrade have allowed US customers to trade 5,503 Binary Options contracts that involve CFTC-regulated commodities in the period from September 2007 to June 25, 2012. This violates the ban of CFTC on the off-exchange options trading.

The Court has also found that TEN has breached a 2005 Cease and Desist Order that the CFTC issued against TEN for similar conduct. As a consequence, the Court has permanently prohibited TEN and Intrade from further violations of the CFTC and CEA Regulations. The Court has also deferred a decision on disgorgement and a civil monetary penalty. 

In addition, the CFTC has dismissed Count III, as the parties have agreed to a resolution where Intrade and TEN distributed almost $250,000 to the US customers. 

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