Court tells binary options firm EZTD to respond to SEC’s claims about unpaid penalty

Maria Nikolova

EZTD is ordered to appear before the Delaware District Court in relation to the SEC’s claims that the firm has not fully paid the civil monetary penalty and disgorgement imposed upon it back in 2016.

A case brought by the United States Securities and Exchange Commission (SEC) against binary options firm EZTD continues at the Delaware District Court, as the US regulator is seeking to compel the firm to pay the full civil monetary penalty and disgorgement imposed upon it back in 2016.

Let’s recall that, the US regulator is having trouble collecting money from EZTD. In the fall of 2016, an Order instructed EZTD to disgorge $1,515,858 plus prejudgment interest of $57,691, and to pay a civil penalty of $200,000, and injunctive relief.

In its motion with the Court filed in September 2018, the US regulator has argued that EZTD has failed, refused and neglected to comply with the Commission Order in that it has not fully paid the disgorgement and prejudgment interest and civil penalty imposed upon it. The SEC requests that, among other things, the Court enter an Order enforcing the Commission Order and requiring:

  • Respondent to disgorge the balance of the $1,515,858 plus prejudgment interest of $57,691, and civil penalty of $200,000 it was required to pay; and
  • Compliance with the Injunctive Relief set forth in the Order from 2016.

Earlier this week, Judge Leonard P. Stark signed an Order determining that EZTD shall appear before the Court on April 25, 2019 and show cause why the final Commission order requiring the firm to pay the balance of the disgorgement order of $1,515,858 plus prejudgment interest of $57,691, and the civil penalty of $200,000, plus post-judgment interest, and injunctive relief, should not be granted.

EZTD is allowed to serve and file any opposing papers by April 11, 2019. If the firm fails to file opposing papers and/or appear at the scheduled hearing, the Court may find the respondent (that is, EZTD) in default and enter an appropriate order against such party at such time without further notice being given.

EZTD is a registered Delaware corporation with a principal place of business in Tel Aviv, Israel and Nicosia, Cyprus, SEC explains.

This matter concerns EZTD’s offers and sales of binary options to US customers, between June 2011 and August 2014, through EZTD’s two online trading platforms, eztrader.com and globaloption.com. The binary options that were the subject of these offers and sales were over the-counter, cash-settled option contracts. They did not give the holder the right to purchase or sell the underlying assets and their time duration was limited. These binary options constituted securities under the federal securities laws.

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