The owner of Y Trading, LLC, Yehuda Belsky, pleaded guilty on Tuesday to three separate charges regarding a binary options and securities Ponzi scheme at the federal courthouse in Brooklyn.
Specifically, Belsky pleaded guilty to one count of securities fraud, one count of failure to register as a commodities trading advisor and one count of misappropriation of customer funds, a press release from the United States Department of Justice said.
As Finance Magnates reported last year, Y Trading and its principal were hit with fraud charges for violating trading regulations and defrauding at least 14 customers.
Belsky’s plea was entered before US District Court Judge Allyne R. Ross. According to the statement, when sentenced, Belsky could be looking at up to 40 years of imprisonment, a fine of up to $5 million, and restitution of each victim’s losses and forfeiture of $800,000.
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Commenting on the case, Richard P. Donoghue, United States Attorney for the Eastern District of New York said: “With his guilty plea today, Belsky is held responsible for deceiving and defrauding investors, and hiding behind an alias to conceal his permanent ban from trading by the CFTC.”
“This Office, together with our law enforcement partners, will continue to protect the integrity of the financial marketplace from dishonest operators like the defendant.”
Background on the Y Trading Ponzi Scheme
Based in Brooklyn, Belsky was permanently barred from trading in commodity futures transactions and options in 2008 by the Commodity Futures Trading Commission (CFTC). However, according to the DOJ, he continued to do so from March 2014 to October 2018.
During this time, the 47-year-old solicited potential investors by using an alias, claiming to be an experienced securities and commodities trader. Under the scheme, he claimed that he would invest his victim’s money by trading securities or binary options.
“Instead of doing as promised, Belsky misappropriated his victims’ investments for his personal use and to reimburse investors who had demanded repayment,” the statement said.