US securities regulator today ordered Peter Szatmari, who worked as a binary options marketer and defrauded investors of $3.8 million, to pay $13.8 million in disgorgement of his allegedly ill-gotten gains as well as in penalties.

Szatmari and his partners were accused of marketing fraudulent binary options to US customers on behalf of their associated brokers. The CFTC had previously fined his colleague David Sechovich for flooding the internet with false and misleading pitches for their get-rich-quick schemes, assessing more than $2.8 million in penalties and restitution.

The two cases were related to prior CFTC actions alleging fraud and prohibited advertising against several other individuals and entities. Today’s enforcement action is the latest in a 7-year-long crackdown by US authorities against binary options fraudsters, which dates back to the time when complaints were filed against Banc de Binary in 2013.

The complaints allege that the fraud scheme has been going on since at least 2013 through July 2017, and involved fraudulent ad campaigns that relied on other marketers, known as ‘affiliates’, to promote trading systems and websites. They attracted their victims by sending misrepresentations about the trading platforms, also paying video producers to make fraudulent testimonials promoting the trading systems.

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While the CFTC describes the defendants’ ads as ‘pure fiction’, the people in the videos told viewers that they were “enjoying rich lifestyles from trading binary options” and purported to show them that their trading balances increase automatically in live accounts.

As detailed in the SEC statement, Szatmari is required to pay approximately $6.25 million in restitution to defrauded customers, $1.9 million in disgorgement, and a civil monetary penalty of $5.7 million.

The regulators said the promotional content produced by these fraudsters were viewed millions of times and caused more than 25,000 people to open binary options accounts with their unregulated brokers. Because they were not registered as a “designated contract market, exempt board of trade or bona fide foreign board of trade,” the court’s order states, the binary-options deals they proposed “constituted unlawful off-exchange options.”