SEC updates on proceedings against binary options firm EZTD

Maria Nikolova

As of November 8, 2017, EZTD has paid a total of $738,980 into the Fair Fund, and any future funds paid by the firm will be added to the Fair Fund for distribution to harmed investors.

The United States Securities and Exchange Commission (SEC) has just posted an update in the proceedings against binary options firm EZTD Inc, which has been found to have violated Sections 5(a) and 5(c) of the Securities Act and Section 15(a)(1) of the Exchange Act and Section 17(a)(2) of the Securities Act.

Back in November 2016, the Commission ordered EZTD to pay a total of $1,773,549 in disgorgement, prejudgment interest, and civil money penalties. The regulator also created a Fair Fund, so the penalty, along with the disgorgement and prejudgment interest, collected can be distributed to those harmed by the firm’s misconduct.

As of November 8, 2017, SEC said today, EZTD has paid a total of $738,980 into the Fair Fund, and any future funds paid by the firm will be added to the Fair Fund for distribution to harmed investors.

On November 10, 2016, the Commission instituted and settled cease-and-desist proceedings against EZTD Inc. In the Order, SEC found that, from June 2011 to August 2014, the Respondent made offers and sales of binary options to US customers, through two of its online trading platforms, eztrader.com and globaloption.com. These binary options constituted securities under the federal securities laws but the firm had failed to register any of its offers and sales of binary options to U.S. customers and it failed to register with the Commission as a broker-dealer.

During the period relevant to this proceeding, EZTD offered and sold binary options through online trading platforms with and through two wholly owned subsidiaries: Win Global Markets, Inc., an Israeli company, and WGM Services Ltd., a Cyprus registered entity.

During the relevant period some 4,000 US customers deposited a total of about $2.5 million to their EZTD accounts. The individual deposits made by US customers ranged in size from $1 to $15,000 with the median individual deposit being $200.

In dollar terms, SEC has estimated that US customers lost around $2 million out of the total $2.5 million that they had deposited to their EZTD accounts. These $2 million in losses resulted not only from trades that expired out-of-the money, but also from accounts EZTD deemed “dormant” where EZTD charged a maintenance fee, and from the failure of some customers to withdraw monies from their account. These US customer losses represented EZTD’s US revenues.

The Commission ordered that EZTD shall pay disgorgement of $1,515,858 together with prejudgment interest of $57,691 and a civil monetary penalty in the amount of $200,000 to the Securities and Exchange Commission.

Read this next

Industry News

Playtech to close Finalto sale to Gopher in two weeks

Playtech, the London-listed gambling software developer, today said it expects to close the divesting of its financial trading division Finalto by mid July 2022.

Retail FX

eToro valuation halved as SPAC merger deadline expires

The deadline for the completion of the SPAC merger of eToro had passed yesterday, June 30, and the Israeli broker apparently canceled the deal with Betsy Cohen-backed blank-check firm.

Institutional FX

FXSpotStream reports second best figure for monthly volumes

Trading volumes on institutional FX platforms surged in June after fears over the impact of Russia’s military invasion of Ukraine sent speculative asset classes reeling.

Retail FX

Vantage expands MT5 offering with access to new stocks

ASIC-regulated foreign exchange brokerage Vantage has expanded its service offering and trading products by incorporating new markets, namely 14 exchange-based stocks on MetaTrader 5.

Digital Assets

CFTC charges $1.7 billion Bitcoin scam, largest to date

Mirror Trading accepted at least 29,421 Bitcoin from approximately 23,000 investors from the United States and even more throughout the world.

Retail FX

Spotware Systems upgrades cTrader Desktop to version 4.3

Spotware Systems, a technology provider for the electronic trading industry, has launched an updated version of its cTrader Desktop, which adds new functionality to join a roster of advanced trading capabilities.

Digital Assets

OKX launches Block Trading for tighter pricing

With Block Trading, users can integrate spot and derivatives trades on the same platform and trade multiple currencies in a single trade. The service supports trading of perpetual swap, futures, and option contracts with popular altcoins as the underlying.

Industry News

Interactive Brokers pays $1 million to settle with CFTC

Interactive Brokers overcharged its customers a total of $710,828.14.

Metaverse Gaming NFT

DappRadar launches cross-chain token staking

The launch of the cross-chain token staking mechanism by DappRadar comes under a partnership with LayerZero protocol, which enables smart contracts to communicate across different chains.

<