Case Status Report: Banc De Binary Litigation

Banc de Binary Litigation

In June 2013, the CFTC filed a lawsuit in U.S. federal court in the District of Nevada against Banc de Binary, Ltd that operates an Internet-based trading platform for “binary options.” U.S. Commodity Futures Trading Commission v. Banc de Binary Ltd., 2:13-cv-00992-MMD-VCF (D. Nev.). The binary options offered by Banc de Binary are offered on a variety of websites, including www.bbinary.com.

The CFTC’s complaint, filed June 5, 2013 and amended May 6, 2014, alleged that Banc de Binary, Ltd. and its co-defendants violated the CFTC’s ban on off-exchange options trading by offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting orders and funds from, and confirming the execution of orders from U.S. customers. Through the Banc de Binary website, customers buy or sell binary “call” or “put” options that allow them to predict whether the price of a certain “asset” will go “up” or “down” at a future date and/or time, with a specified payout structure.

On February 29, 2016, the district court entered a Consent Order of Permanent Injunction, Civil Monetary Penalties and Other Equitable Relief against Banc de Binary Ltd. E.T. Binary Options Ltd., BO Systems Ltd. (now named and registered in Seychelles as Banc De Binary Limited), BdB Services Ltd., and Oren Shabat Laurent (“Consent Order”). The Consent Order required Defendants to pay restitution of $7.1 million and civil monetary penalties totaling $2 million. A list of U.S. customers owed restitution was also approved by the court.

The Consent Order was entered as part of a global settlement that resolved the CFTC’s case against these defendants, as well as a parallel action filed by the U.S. Securities Exchange Commission (“SEC”) against the same defendants. Security and Exchange Commission v. Banc de Binary Ltd., et al., 2:13-cv-00993-RCJ-VCF (D. Nev.). The SEC received $1.95 million in civil monetary penalties, which by statute may be included in the funds being distributed back to investors.

The Consent Order appoints the National Futures Association (“NFA”) as the Monitor to return the restitution to Banc de Binary’s customers. The NFA is a futures association registered with the CFTC pursuant to Section 17 of the Commodity Exchange Act, 7 U.S.C. § 21, that serves as the industry-wide, independent, self-regulatory organization for the U.S. futures industry. Information regarding the distribution can be obtained by contacting the NFA at [email protected] or visiting the NFA’s website

http://www.nfa.futures.org/restitution/bdb.html

or sending an email inquiry to the CFTC at [email protected], or calling the CFTC’s toll free number at (800) 850-7266.

Also, the SEC and the CFTC have become aware of communications, including official looking documents, that falsely claim to be issued by the Securities and Exchange Commission and seek money from investors who have deposited money with the defendants on their “Banc de Binary” binary option website trading platforms.  Eligible investors should beware of any requests to pay any additional money in order to obtain a distribution from the settlement fund in this case or the SEC.  There is no such requirement in either case to claim a distribution.  An investor in “Banc de Binary” binary options who is entitled to receive a distribution from the Banc de Binary – Restitution Fund does not have to pay any amount of money in order to receive a distribution from the fund.

 

 

Last Updated: March 9, 2016