SEC takes action against binary options marketers

Maria Nikolova

The regulator has charged a group of internet marketers who created and disseminated videos to lure retail investors to trade binary options.

There are more developments in the US regulatory clampdown on binary options fraud, with the action spreading to marketing companies.

Earlier today, the Securities and Exchange Commission (SEC) announced it had charged a group of internet marketers who created and disseminated videos to lure retail investors to open brokerage accounts and trade binary options.

According to the SEC’s complaints, investors were defrauded of tens of millions of dollars through these marketing campaigns, which promised that investors would make large amounts of money by opening binary options accounts and using free or secret software systems to trade in them. The regulator alleges that the marketers were paid for each new brokerage account that investors opened and funded.

According to the complaints, the marketers’ video advertisements, which were disseminated through spam emails, used actors to portray ordinary people who became millionaires by trading binary options. The videos staged fake demonstrations of supposed software users watching their account balances grow in real time. The SEC alleges that the software was simply a ruse to persuade investors to open accounts with the brokers.

The SEC’s complaints charged 10 individuals and two companies involved in the fraudulent marketing campaigns. The SEC’s investigation goes on.

The SEC’s complaints seek penalties, disgorgement of ill-gotten gains, and permanent injunctions against Timothy J. Atkinson, Ronald “Ronnie” Montano, Jay Passerino, Michael Wright, and All In Publishing LLC. Justin Blake Barrett, William E. Berry and his company Berry Mediaworks, Grayson Brookshire, Antonio Giacca, Shmuel Pollen, and Travis Stephenson have agreed to settle the SEC’s charges. Without admitting or denying the charges, they agreed to pay a combined total of $4.1 million in disgorgement and prejudgment interest. Pollen has agreed to pay a $42,500 penalty. The Commission did not assess a penalty on the other settling parties as a result of their cooperation.

Actions against binary options firms are often problematic. In an action filed earlier this week against EZTD, SEC is seeking the Court’s assistance as the firm has failed to pay the full amount of monetary penalty and disgorgement it was ordered to pay by an Order issued by the US regulator in November 2016.

The CFTC has also been active in going after binary options scams. It is currently pushing for a heavy monetary penalty to be imposed on binary options marketers Michael Shah and his company Zilmil, Inc. The regulator requests the defendants to pay disgorgement in the amount of $18.67 million, as well as a civil monetary penalty of $56 million.

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