The now-defunct binary-options brand Y Trading and its principal Yehuda L. Belsky, of Brooklyn, New York, have been hit with fraud charges for violating trading regulations and defrauding at least 14 customers.
The company is no longer doing business via the internet, at least not while using the names under which it has been sanctioned and banned.
The CFTC’s initial legal action in 2015 describes Y Trading charges as allowing US customers to trade binary options products prohibited under the CFTC’s rules. The order also finds that Belsky, using the fake name of “Jay Bell” to conceal his identity, defrauded customers by making false representations in his solicitations and misappropriating their funds.
The agency says that rather than trade binary options on behalf of their clients, Belsky misappropriated almost $1.3 million of client funds.
Why Ethereum Needs Layer 2 Solutions More Than EverGo to article >>
Because neither of the defendants was registered as a designated contract market, exempt board of trade or bona fide foreign board of trade, the CFTC’s order states, the binary-options deals Y Trading proposed constituted unlawful off-exchange options.
The defendants falsely told their customers, among other claims, that they offer a safe investment with steady and guaranteed returns. Belsky solicited pool participants by falsely representing to them the purported success of his personal investments and that he had “strong skills” in options trading.
Violations since a Decade Ago
In addition, the complaint alleges that Belsky and a company he previously owned violated an order issued by the CFTC in 2008 that found the company engaged in similar conduct and was ordered to cease from violating the regulations.
The CFTC has asked the court to provide full restitution to defrauded pool participants, disgorgement of ill-gotten gains and to pay the appropriate civil monetary penalties. In addition to fiscal claims, the agency seeks permanent registration and trading bans and a permanent injunction from future violations of federal commodities laws.