24option accuses CFTC of harassment in legal action over Google subpoena

Richfield Capital Limited, trading as 24option.com, has challenged the United States Commodity Futures Trading Commission (CFTC) over a subpoena the regulator has issued to Google.

On Wednesday, March 7, 2018, the binary options firm filed a Motion with the Illinois Northern District Court, asking it to quash subpoena(s) issued to Google, Inc. on or about February 16, 2018.

Google has sent an email to 24option stating as follows:

”Google has received a subpoena for information related to your Google account in a case entitled In the Matter of Certain Persons & Entities Engaged in Prohibited Off-Exchange Binary Options Transactions, U.S. Commodity Futures Trading Commission, Division of Enforcement. This email serves as notice to you that Google may produce information related to your Google account in response to this subpoena…”

Richfield Capital says that because no one has provided a copy of the subpoena(s) to the respondent, the actual nature of the subpoena is uncertain. The firm alleges that regardless of the nature of the documents, however, the subpoena(s) should be quashed because:

• they have an improper purpose; Richfield Capital is not subject to CFTC’s subject matter jurisdiction, as it is registered in Belize, and “thus any investigation here is harassment”, and
• the subpoena(s) likely calls for production of information barred by the Stored Communications Act.

While the CFTC properly may subpoena information regarding binary options trading, the Commission lacks any authority to do so beyond the territorial jurisdiction of the United States, the firm claims.

The CFTC maintains RED List of registration deficient retail FX and binary options firms. The regulator frequently receives investigative leads and questions from the public about foreign entities that solicit and/or accept funds from U.S. residents at a retail level. Many of these entities are acting in a capacity that requires them to be registered with the CFTC.

In certain cases, a preliminary review by the CFTC reveals that foreign entities that solicit and/or accept funds from U.S. residents at a retail level have no or limited US presence, and act in a capacity that appears to require registration, but are not in fact registered.

Given the subpoenas sent by the CFTC, the regulator is going further in its efforts to check reports of suspicious online trading firms.

The case is captioned Richfield Capital Limited v. U.S. Commodity Futures Trading Commission (1:18-cv-01694).