The Commodity Futures Trading Commission (CFTC) announced that the U.S. District Court for the Northern District of Illinois entered a default judgment against five offshore entities and three individuals for fraud and other violations of the Commodity Exchange Act and CFTC regulations tied to a global retail binary options scheme that victimized U.S. residents. The order imposes joint and several monetary relief, permanently enjoins the defendants from further violations as charged, and bans them from CFTC registration and trading in any CFTC-regulated markets. The defendants operated through websites using fictitious trade names including BigOption, BinaryBook, and BinaryOnline, and include Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Limited (BigOption), WSB Investments Ltd. (BinaryBook), Zolarex Ltd. (BinaryOnline), and individuals Yossi Herzog, Lee Elbaz, and Shalom Peretz. The court found that from 26 March 2014 to 12 August 2019 the defendants made fraudulent misrepresentations about profitability, misrepresented broker identities and locations, misappropriated customer funds, obstructed withdrawals through undisclosed “bonuses” and “risk-free trades,” and manipulated platform risk settings to limit winning outcomes; it ordered USD 112.9 million in restitution and a USD 338.7 million civil monetary penalty. The CFTC also noted a prior consent order against Yakov Cohen requiring disgorgement of USD 7 million, and parallel criminal proceedings in which Elbaz was sentenced to 20 years’ imprisonment and ordered to pay USD 28 million in restitution, while Cohen was sentenced to 5.5 years and ordered to pay USD 7 million in restitution.
Commodity Futures Trading Commission 2025-01-29
Commodity Futures Trading Commission secures default judgment ordering USD 112.9 million restitution and USD 338.7 million penalty in offshore binary options fraud
The CFTC announced a default judgment by the U.S. District Court for the Northern District of Illinois against five offshore entities and three individuals for fraud in a global retail binary options scheme. The court ordered USD 112.9 million in restitution and a USD 338.7 million civil penalty, permanently enjoining the defendants from further violations and banning them from CFTC registration and trading. The CFTC noted prior related criminal proceedings, including significant prison sentences and restitution orders.