SEC turns to Court as binary options firm EZTD fails to fully pay penalty and disgorgement
SEC seeks a Court order instructing EZTD 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.
The battle against unauthorized binary options schemes in the US is not simple, especially when it comes to making such schemes pay what they were ordered to pay. This is demonstrated by a motion filed by the Securities and Exchange Commission (SEC) with the Delaware District Court earlier this week.
The document shows that the US regulator is having trouble collecting money from EZTD, a binary options firm against which SEC took action back in 2016. The action culminated in an Order in November 2016 requiring EZTD to disgorge $1,515,858 plus prejudgment interest of $57,691, and pay a civil penalty of $200,000, and injunctive relief.
In its motion with the Court, the US regulator argues 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. We do not have the latest numbers about the sum that EZTD still has to pay. According to an update posted by SEC on its website in November 2017, EZTD had paid a total of $738,980 into the Fair Fund.
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.
EZTD is a registered Delaware corporation with a principal place of business in Tel Aviv, Israel and Nicosia, Cyprus, SEC explains.
This matter involves, in summary, 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.