March 21, 2017
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge James I. Cohn of the U.S. District Court for the Southern District of Florida entered a Consent Order against CFTC Defendants Neil Pecker with a last-known address in Longwood, Florida and his company, Vision Financial Partners, LLC (Vision) of Deerfield Beach, who were charged with fraudulent solicitation and misappropriation in connection with off-exchange binary options. The Order, entered on March 9, 2017, requires Pecker and Vision, jointly and severally, to pay restitution to defrauded investors totaling $2,777,130 and a $3.75 million civil monetary penalty.
The Order also imposes permanent trading and registration bans against Pecker and Vision and prohibits them from committing further violations of the Commodity Exchange Act and CFTC Regulations, as charged.
The Order also requires Relief Defendants Prometheus Enterprises, Inc. of Deerfield Beach, Florida, and GDCM Trust of Las Vegas, Nevada, to disgorge over $1 million of ill-gotten funds.
The Order arises from a CFTC enforcement anti-fraud action filed against the Defendants and Relief Defendants on February 16, 2016 (see CFTC Complaint and Press Release 7334-16, CFTC Charges Florida Resident Neil Pecker and His Company, Vision Financial Partners, LLC, with Fraud in Connection with Off-Exchange Binary Options and Registration Violations).
The Court’s Findings
The Order finds that Pecker and Vision fraudulently solicited approximately $3 million from over 120 members of the public in the U.S. and Canada to trade off-exchange binary options.
The Order further finds that 1) the Defendants made misleading and false representations to prospective clients, including about Defendants’ registration status and trading experience, and the likelihood of making money if they traded binary options through Defendants, and 2) the Defendants failed to 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.
Defendants’ Misappropriated Almost $2 Million of Client Funds
The Order also finds that, rather than trade binary options on behalf of their clients, the Defendants misappropriated almost $2 million of client funds, and diverted client funds to Relief Defendants. The Relief Defendants did not provide any legitimate services or have any legitimate entitlement or interest to the clients’ funds, the court found.
The Order also finds that 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.
CFTC Litigation Is Continuing as to Two other Relief Defendants
The CFTC’s litigation is still continuing against the two other Relief Defendants charged in the action: Westward International Ltd. and Coucarin Holdings, Ltd.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC thanks the U.K. Financial Conduct Authority, Cyprus Securities and Exchange Commission, St. Vincent and the Grenadines Financial Services Authority, Ontario Securities Commission, New Brunswick Financial and Consumer Services Commission (formerly New Brunswick Securities Commission), Cayman Islands Monetary Authority, British Columbia Securities Commission, Alberta Securities Commission, Anguilla Financial Services Commission, Gibraltar Financial Services Commission, and the British Virgin Islands Financial Services Commission for their assistance in this matter.
CFTC Division Enforcement staff members responsible for this case are Eugenia Vroustouris, Michelle Bougas, Erica Bodin, Elizabeth C. Padgett, Mary Q. Lutz, Elizabeth Davis, and Rick Glaser.
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See CFTC’s Binary Options Customer Fraud Advisory and “RED” List
The CFTC has issued a Consumer Alert to warn about fraudulent schemes involving binary options and their trading platforms. The Alert warns customers that the perpetrators of these unlawful schemes allegedly refuse to credit customer accounts, deny fund reimbursement, commit identity theft, and manipulate software to generate losing trades.
Also, see CFTC Press Release 7224-15, September 9, 2015, CFTC Publishes List of Foreign Entities that Illegally Solicit U.S. Residents to Trade Foreign Currency and Binary Options; The New Registration Deficient ‘RED List’ Identifies Companies Operating Illegally and CFTC Press Release 7363-16, April 18, 2016, CFTC Announces Additional Names to Its List of Foreign Entities that Illegally Solicit U.S. Residents in Forex and Binary Options.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: April 7, 2017