CFTC Files Fraud Charges Against Binary Options Gang
The Commodity Futures Trading Commission (CFTC) has brought civil charges against five Canadians, including three Canadian-Israeli brothers, for soliciting victims to trade binary options, bilking investors out of $165 million.
Joshua Cartu, Jonathan Cartu, and David Cartu allegedly operated three binary options brands, BeeOptions, Glenridge Capital, and Rumelia Capital, from a call center they established in Israel. The now-shuttered facility, which is understood to have operated from the Tel Aviv area, went by the name of Tracy PAI Management Limited (Tracy PAI).
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In addition, the CFTC charges two Canadian brothers living in Israel—Leeav Peretz and Nati Peretz— of helping the Cartu brothers in targeting U.S. residents by promising “quick” returns of “between 60-85%” by trading binary options.
The CFTC further alleged the Cartu brothers set up two companies in Ireland to facilitate payments for their own binary options brands as well as for brands belonging to different people. A company known as UKTVM Ltd. (UKTVM) was established in the UK to process credit card payments for BeeOptions.com and Glenridgecapital.com. At a later date, processing was carried out by a company called Greymountain Management, which was incorporated in Ireland and acquired credit card payments for binary options companies.
From 2014 through 2017, they received about $165 million from investors worldwide, including the US and Canada. Once the money was “invested,” the defendants usually refused to allow these clients to withdraw their money.
The regulator said the call center in Israel functioned as a “boiler room,” a type of fraud that involves cold calling potential investors offering to sell them exotic financial products. Further, the defendants allegedly controlled binay transactions and manipulated the results of some trades to force customer losses and generate profits for themselves.
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Also charged in the same case is Ryan Masten of Austin, Texas, and his company BareIt Media LLC d/b/a SignalPush, a Texas entity, as well as All Out Marketing Limited, Blue Moon Investments, Ltd., and Orlando Union Inc., each an offshore entity owned and controlled by one of the Cartu brothers.
As was customary, sales staff at these comapnies lied about their names, location, titles, experience, and the fact that they made profits when the traders lost their balance.
“At the direction of the Cartu and Peretz brothers, the individual brokers soliciting U.S. customers falsely represented their financial expertise, compensation structure, physical location, and identity. These brokers also falsely claimed that the offered binary option transactions were profitable, when the majority of customers lost money,” the CFTC further states.
The CFTC is seeking full restitution to the defrauded individuals, disgorgement of earnings from the fraud, civil monetary penalties, permanent registration and trading bans.
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