US court slams binary options fraud, imposes $6.5m in penalties on Vision Financial Partners

Maria Nikolova

Neil Pecker and his company Vision Financial Partners, LLC will have to pay restitution to defrauded investors of about $2.78 million and a $3.75 million civil monetary penalty.

Off-exchange binary options trading is prohibited in the United States and offering such services is against US laws. Violations of this type are treated seriously, with the latest piece of proof provided today by a Federal Court in Florida.

Today, the United States Commodity Futures Trading Commission (CFTC) announced that Judge James I. Cohn of the U.S. District Court for the Southern District of Florida entered a Consent Order against Neil Pecker of Florida and his company, Vision Financial Partners, LLC (Vision) of Deerfield Beach. The defendants were charged with fraudulent solicitation and misappropriation in connection with off-exchange binary options.

The Order requires Mr Pecker and Vision to pay restitution to defrauded investors amounting to $2,777,130 and a civil monetary penalty of $3.75 million.

The Order also introduces permanent trading and registration bans against Pecker and Vision and prohibits them from further violations of the Commodity Exchange Act and CFTC Regulations.

In addition, the Order requires Relief Defendants Prometheus Enterprises, Inc. of Deerfield Beach, Florida, and GDCM Trust of Las Vegas, Nevada, to disgorge more than $1 million of ill-gotten funds.

The Order finds that Mr Pecker and Vision fraudulently lured about $3 million from more than120 investors in the U.S. and Canada to trade off-exchange binary options. The violations include the company and Mr Pecker making misleading and false representations to prospective clients, including ones concerning registration status and trading experience, as well as chances of making money when trading binary options. The Defendants also did not disclose that trading occurred through unregistered foreign or off-shore firms and that clients were prohibited from withdrawing funds from their trading account, including their own funds initially invested, unless and until the client traded at least 20 times the value of the trading account.

Instead of trading binary options on behalf of their clients, the Defendants misappropriated almost $2 million of client funds, and diverted client funds to Relief Defendants.

Vision and Pecker acted as a Commodity Trading Advisor (CTA) and as an Associated Person of a CTA, respectively, without being registered as such with the CFTC, as required.

The CFTC’s litigation continues against the two other Relief Defendants charged in the action: Westward International Ltd. and Coucarin Holdings, Ltd.

The move by the Florida Court and the CFTC happens as the fight against binary options fraud gathers speed. Since there are Canadian investors amid the victims of the Vision fraud, let’s mention that some Canadian provinces like Quebec are considering drastic measures against binary options offering.

The CFTC, in its turn, publishes a RED list of registration-deficient firms that unlawfully target US investors. A recent check by FinanceFeeds has shown, however, that some 62% of the binary options and FX brokers on the RED List continue to operate. Moreover, 35% of the total still openly target US investors.

Read this next

Industry News

Celsius $750m insurance claims are fraud, says lawyer seeking EU crypto superfund

“It is an intentional deception in aid of a billion-dollar securities offering.”

Institutional FX

DGCX brokers authorized to provide derivatives trading and clearing services

The DFM is looking to provide multiple asset classes such as; equities, ETFs, equities’ futures, crude oil futures, etc. to meet the growing demand from its diversified base of local and international investors.

Digital Assets

EQONEX leaves “crowded crypto exchange space” amid crypto winter

“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators. We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”

Digital Assets

FTX and Paradigm partner for spreads trading: lower risk, lower fees

“This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

Industry News

SEC uncovers online retail brokerage hacking scheme

Fraudsters were able to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds, the SEC alleged. 

Executive Moves

Cornerstone FS taps James Hickman as CEO

“I see great potential in the business from its proprietary technology to its regulatory permissions. It is already delivering an exceptional service to its SME customers and the scalable platform is ideally positioned to add further product capability.”

Retail FX

FCA warns of Lite Forex Pro as crackdown on clone scams continues

The UK Financial Conduct Authority has put out a press release that warns about a new ‘clone firm’ investment scam impersonating LiteForex‎, which rebranded last year as LiteFinance.

Digital Assets

Novogratz’s Galaxy Digital backs out of $1.2 billion deal to buy BitGo

Crypto merchant bank Galaxy Digital would not move forward with its bid to buy digital-asset custodian BitGo.

Executive Moves

OctaFX elevates Nikolas Charalampous to executive director role

OctaFX has promoted its head of dealing, Nikolas Charalampous, to the role of executive director, which saw the expansion of his day-to-day responsibilities and oversight.