On June 6 the CFTC has charged Banc De Binary with violating the CFTC Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant (FOM). In the press release the CFTC alleges that Banc De Binary unlawfully solicited and permitted U.S. Customers to buy and sell options betting on the price of commodities, foreign currency pairs and stock indices.
They also claim that Banc De Binary operated as an unregistered FCM from July 2011 – March 2013. Finally the claim alleges that they allowed US customers to trade without requiring information about their trading history or net worth.
The civil complaint was filed in the in the Federal District court of Nevada. The CFTC seeks monetary penalties. an injunction preventing Ban De Binary from engaging in certain options activity with US traders as well as other monetary restitution.
SEC Files Injunction Against Banc De Binary
Concurrently the SEC filed a civil injunction against Banc De Binary in the US district court in Nevada for selling binary options illegally in the US. The claim for relief is based on the violation of Section 5 and Section 15a of the securities act. Section 5 is the unregistered offer and sale of securities and section 15a acting as an unregistered broker dealer. Based on the alleged violation of securities exchange act the SEC seeks an injunction against Banc De Binary from continuing activities in the US as well as disgorgement and civil penalties.
Much of the claims against Banc De Binary relate to the aggressive nature with which they attempt o secure US accounts including YouTube videos, spam emails and other Internet advertising. They also communicated directly with investors via phone, email and instant messenger. Banc De Binary had also listed its operations at a Wall Street address, when in fact they are Cyprus based company.
The CFTC acknowledged support from the SEC as well as the UK Financial Conduct Authority and the Cyprus SEC for their assistance in the investigation.
The CFTC and the SEC has issued a joint fraud advisory relating the certain binary options brokers and activity that may be fraudulent in nature.
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Banc De Binary vs SEC and CFTC Summary