The US Securities and Exchange Commission (SEC) today said that it has collected a total of $738,980 into the Fair Fund that was created a year ago to compensate defrauded investors of Israeli binary options broker EZTD, according to its recent filing on the matter.
Last year, the US regulator levied a hefty penalty against EZTD, ordering it to pay more than $1.7 million for misleading investors about the profitability of trading binary options, which led to US traders losing about $2 million.
The company, which terminated its registration with the SEC two months ago, agreed to forfeit about $1.5 million in revenues from US customers and pay a $200,000 penalty for failing to register as a broker under federal securities laws.
The SEC said in their statement that EZTD represented to investors that binary options would be “highly profitable” when, in fact, there was “significantly greater potential” for them to lose money.
Although the SEC collected the said sum for shareholders as of November 8, 2017, it didn’t disclose how much it managed to distribute of the funds, if any at all. However, it’s expected that the SEC will have trouble identifying shareholders who should receive funds – EZTD drew $2.5 million in deposits from about 4,000 customers.
The plan also didn’t specify categories potentially eligible to receive proceeds from the fund, a proposed date for the termination of the fund or procedures for its administration.