The US Securities and Exchange Commission has imposed more than $60 million in fines and penalties against three US-based binary options marketers. Timothy Atkinson, his former business partner Jay Passerino, and their business ‘All in Publishing’ were accused of marketing fraudulent binary options to US customers on behalf of their associated brokers.
The SEC today announced the final judgment orders by a Florida federal court against the two affiliates, as well as another marketer called Michael Wright, who “aided and abetted the fraud.”
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.
While the SEC 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.
The penalties, in this case, are the largest the US authorities have imposed so far against binary options operators.
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The CFTC also filed complaints
All three defendants have agreed to settle with the SEC, without admitting or denying the allegations in the complaint, and will pay a total of $61.5 million collectively in disgorgement of their ill-gotten gains, interest as well as in penalties.
As detailed in 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 he also agreed to pay a civil penalty of $27,208,987.
The final judgment entered against Passerino orders him to pay disgorgement of $1,894,991 in ill-gotten gains, $220,431 in prejudgment interest, and a civil penalty of $1,894,991,” the SEC added. Michael Wright was also ordered to pay $266,353 to resolve pending claims.
The CFTC also filed complaints in Florida federal district courts against the defendants for flooding the internet with false and misleading pitches for their get-rich-quick schemes.
The regulators said the promotional content produced by these fraudsters were viewed millions of times and caused more than 50,000 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.”