Court grants CFTC request for preliminary injunction against binary options scammers behind $4.8m scheme

Maria Nikolova

The Illinois Northern District Court has issued an Order for Preliminary Injunction against Arie Bos, Berkley Capital Management, LLC (BCM), BBOT 1, LP and Berkley II, LP.

Shortly after the United States Commodity Futures Trading Commission (CFTC) filed its motion for a preliminary injunction against binary options entities responsible for a $4.8 million fraudulent scheme, the Court has agreed with the regulator and has approved the request.

The relevant order has been signed by the Honorable Robert M. Dow, Jr of the Illinois Northern District Court.

The CFTC sought a preliminary injunction against Arie Bos, Berkley Capital Management, LLC (BCM), BBOT 1, LP and Berkley II, LP, arguing that a preliminary injunction is proper in this case to preserve the status quo, prevent the withdrawal, transfer, removal, dissipation, or disposal of assets; prevent the destruction, alteration, or disposal of books and records and other documents; protect members of the public from loss and damage; and enable the CFTC to fulfill its statutory duties.

The Court Order shall remain in full force and effect until further order of the Court, and the Court shall retain jurisdiction over this action to ensure compliance with this Order and for all other purposes related to this action. The Order will supersede the Statutory Restraining Order entered on May 1, 2019 as it relates to defendants Bos, BCM, BBOT and Berkley II.

According to the CFTC Complaint, from at least January 2016 and continuing through the present, William Thomas Caniff, Arie Bos, Berkley Capital Management, LLC (BCM), BBOT 1, LP and Berkley II, LP, engaged in a scheme whereby they fraudulently solicited and accepted at least $4.8 million from at least 62 commodity pool participants for the purpose of trading binary options on or subject to the rules of a designated contract market in pool accounts to be managed by BCM.

The CFTC alleges that all of the defendants committed options fraud, whereas Caniff is said to also have made a false statement to a registered entity.

In January 2016, Caniff and Bos formed BCM and began to offer individual participants the opportunity to trade binary options with pools of other participants, first through the BBOT pool and later through the Berkley II pool. Caniff used a small portion of participants’ funds to trade binary options through an account he set up at the binary options trading firm, the North American Derivatives Exchange, Inc. (NADEX), which is a designated contract market headquartered in Chicago, Illinois.

Caniff sent Bos fabricated statements reflecting incredible results of his trading for these pools. In turn, Bos ignored numerous red flags and recklessly accepted Caniff’s reports of profitable trading without verifying the results in any way and used them to both solicit participants with claims of past profitable trading and generate false statements that he sent to participants showing grossly-inflated, non-existent, profits for their accounts.

The CFTC Complaint alleges that Caniff misappropriated a substantial portion of the participants’ funds, paying Bos and himself between $1.1 million to $1.2 million each as “fees based on non-existent profits. Caniff also misappropriated funds to pay some participants a total of $2.3 million in a manner akin to a Ponzi scheme. Overall, the defrauded participants have experienced a shortfall of approximately $2.5 million.

Read this next

Digital Assets

Societe Generale launches its own cryptocurrency, EURCV

French banking giant Societe Generale has launched its own euro-pegged stablecoin, EUR CoinVertible (EURCV). This move by France’s third-largest bank reflects the increasing trend of mainstream financial institutions embracing cryptocurrencies on a global scale.

Executive Moves

Stelios Eleftheriou leaves NAGA Group to join BVNK

BVNK, the crypto-powered payments and banking platform for businesses, has appointed FX industry veteran Stelios Eleftheriou, who has a colorful career across the gaming industry, as Business Development Director (CFD & iGaming).

Retail FX

CAPEX.com introduce ETFs on UAE, Saudi stocks

Abu Dhabi-based broker CAPEX.com has expanded its asset class offerings to include a new suite of Exchange-Traded Funds (ETFs) tailored for the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) markets.

Institutional FX

Tradeweb Markets surges past $1.80 ADV in November

Tradeweb Markets Inc. (Nasdaq: TW) has reported a total trading volume of $38.2 trillion and a record average daily volume (ADV) of $1.80 trillion for November 2023. These figures mark a 59.2% year-over-year increase.

Inside View

A Mission in Accounting

Ismael Haber, an auditor and accountant, has made it his mission to help businesses improve the quality of their financial information by eliminating fraud and error. In the next five years, the demand for these specific financial services, being external financial audits, forensic accounting, and other fraud preventive and detective services is envisaged to increase.

Institutional FX

CME Group to launch new spot FX marketplace ‘CME FX Spot+’ in 2024

US derivatives exchange, CME Group today announced plans to introduce ‘CME FX Spot+’, a novel spot foreign exchange (FX) marketplace.

Interviews

FMLS:2023: Andrew Mreana provides an exclusive sneak peek into cTrader’s 2024 innovations

cTrader’s focus for the next year would be on developing new tools for Introducing Brokers (IBs) and partners, particularly those related to algorithmic (algo) trading, the company’s head of growth told FinanceFeed in an exclusive interview at the Finance Magnates London Summit 2023.

Digital Assets

Grayscale’s Ethereum ETF stalls: SEC extends review to January 2024

The United States Securities and Exchange Commission (SEC) has extended the evaluation period for Grayscale’s proposed Ethereum spot ETF.

Institutional FX

BMLL completes China equity data offering: Shanghai, Shenzhen, and Hong Kong

“Demand for China data has never been higher. This is set against a general industry trend of increased market participant sophistication, and an increasing demand for quality historic market data to understand market microstructure and venue behaviour. Market participants need to get the full picture of market quality, liquidity and order book dynamics to ultimately make better informed decisions on the markets they trade and the venues they run.”

<