SEC pushes for entry of default against fraudsters behind LBinary and Ivory Option

Maria Nikolova

The regulator moves the Court to enter the default of against Anton Senderov and Lior Babazara a/k/a Lior Bar.

The United States Securities and Exchange Commission (SEC) continues with its efforts to put and end to fraudulent binary options schemes.

Several months after the regulator filed its action against Anton Senderov and Lior Babazara a/k/a Lior Bar, charging them with defrauding more than 2,800 US investors through online sales of binary options, the SEC is now pushing for an entry of default against the defendants.

On June 25, 2020, the SEC submitted a motion for an entry of default against the defendants at the Washington Eastern District Court. The document, seen by FinanceFeeds, states that, as of June 25, 2020, the Court’s docket reflects that neither of the defendants have filed any pleading responsive to the SEC’s Complaint. Accordingly, the SEC requests that the Clerk of the Court enter default against both defendants.

The SEC’s complaint alleges that Senderov and Babazara defrauded investors through two online binary options brokers they controlled, LBinary and Ivory Option. The defendants also owned and controlled LianTech Finance Marketing, Ltd., which operated a call center in Israel that functioned as a “boiler room.”

According to the SEC’s complaint, employees at the call center allegedly persuaded investors to open binary option trading accounts and deposit significant sums into those accounts. Call center employees lied to investors about their professional backgrounds and falsely told investors that the brokers earned money only if investors made money. In reality, the brokers earned money only from investor losses and therefore had no incentive to advise investors on how to trade binary options profitably.

Most investors lost money, with some losing their entire savings. The binary options brokers largely refused to honor investor requests to withdraw money from their trading accounts.

The SEC’s complaint charges Senderov and Babazara with violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The duo is also charged with violating Section 20(a) of the Securities Exchange Act of 1934 (Exchange Act) by acting as control persons for LianTech, LBinary, and Ivory Option’s uncharged violations of the antifraud provisions of Sections 10(b) and 15(a) of the Exchange Act and Rules 10b-5(a) and (c) thereunder.

The regulator seeks disgorgement of ill-gotten gains, prejudgment interest, financial penalties, and permanent injunctions against the defendants.

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