Binary options scammer who defrauded victims of $3.8m disappears – CFTC says

Maria Nikolova

The regulator cannot locate Peter Szatmari, who is accused of having operated a large-scale binary options fraud scheme.

The United States Commodity Futures Trading Commission (CFTC) is unable locate and effect service on a binary options scammer who defrauded victims of at least $3.8 million. This becomes clear from the latest filings in the case against Peter Szatmari.

On November 25, 2019, the CFTC moved the Hawaii District Court for an order authorizing the regulator to serve Szatmari by publishing notice in the Hawaii Star Advisor. Despite its diligent efforts, the Commission has been unable to locate and serve Szatmari.

On October 7, 2019, the CFTC filed a five-count Complaint against Szatmari, alleging serious violations of the Commodity Exchange Act, 7 U.S.C. §§1-26 (2012) (“Act”) and Commission Regulations 17 C.F.R. pts. 1-190 (2019).

Prior to filing its Complaint, the Commission engaged in settlement discussions with Szatmari and reached an agreement in principle. However, before executing the settlement documents, Szatmari backed out of the settlement, his attorney advised the Commission that he no longer represented Szatmari and Szatmari disappeared.

When the Commission asked Szatmari’s attorney for Szatmari’s contact information, he provided a P.O. Box in Kahului, Hawaii, and responded,

“Mr. Szatmari has instructed me that he does not want me to supply you with any additional information.”

According to the order and as alleged in the complaint, Szatmari lured prospective customers by disseminating fraudulent marketing materials in six marketing “campaigns.” These solicitations instructed unsuspecting investors to open and fund binary options accounts with “recommended” brokers to get free access to automated trading software that purported to generate astronomical profits with no risk of loss. According to the filings, these marketing materials included numerous false or misleading statements.

Szatmari also failed to disclose that he received a fee from the binary options brokers he recommended every time a new account was opened and funded as a result of his solicitations. Further, he failed to disclose that this fee arrangement was the sole basis for recommending brokers. Szatmari’s fraudulent solicitations were disseminated to and/or viewed by millions of prospective customers, with approximately 25,000 customers opening binary options trading accounts and funding those accounts, usually with an initial deposit of $250 or more.

In its litigation against Szatmari, the CFTC seeks full restitution to defrauded individuals, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.

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