Release Number 7336-16
March 9, 2016
Federal Court Orders Banc de Binary Ltd., ET Binary Options Ltd., BO Systems Ltd., BDB Services Ltd., and Oren Shabat Laurent to Pay More than $9 Million in Restitution and a Civil Monetary Penalty for Violating the CFTC’s Ban on Trading Binary Options Off-Exchange
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that a federal court in Las Vegas, Nevada, issued a Consent Order requiring Defendants Oren Shabat Laurent of Israel and his companies E.T. Binary Options, Ltd. of Israel, Banc de Binary, Ltd. of Cyprus, BO Systems, Ltd. of the Seychelles, and BDB Services, Ltd. of the Seychelles (collectively, Banc de Binary) to pay $7.1 million in restitution to U.S. customers who traded the illegal, off-exchange options (in this case, binary options) offered by the Defendants. The Defendants were also ordered to pay a $2 million civil monetary penalty. The Order also imposed a permanent ban on offering or trading any further off-exchange binary options to U.S. customers.
The Order, entered on February 26, 2016, stems from a CFTC complaint filed June 5, 2013 (see CFTC Press Release 6602-13) and amended May 6, 2014 (see CFTC Press Release 6923-14), charging the Defendants with violating 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, or 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.
In the Order, the Court found that the corporate Defendants acted as the counterparty to their customers’ binary options transactions on a variety of assets, including commodities (e.g., wheat, oil, gold, platinum, sugar, coffee, corn, etc.), forex pairs (e.g., EUR/USD, GBP/USD, USD/JPY, etc.), and stock indices (e.g., S&P 500 and NASDAQ futures). The Court further found that the Defendants’ customers were not eligible contract participants (i.e., the Defendants’ customers were retail customers). These transactions, the Court found, violated federal laws prohibiting the trading of options off-exchange.
In a parallel action, the U.S. Securities and Exchange Commission (SEC) also resolved its pending litigation against the Defendants. SEC v. Banc de Binary, Ltd., et. al., 2:13-cv-00993-RCJ-VCF. As a result of the CFTC and SEC Orders, the Defendants are required to pay more than $9 Million to U.S. customers.
The CFTC thanks the SEC in this matter for its cooperation. The CFTC also thanks the Cyprus Securities and Exchange Commission, Israel Securities Authority, Ontario Securities Commission, Swiss Financial Market Supervisory Authority, and the U.K. Financial Conduct Authority for their assistance in this matter.
CFTC staff members responsible for this case are Margaret Aisenbrey, Kim Bruno, Michelle Bougas, Erica Bodin, Jessica Harris, Nate Gueltzau, Joyce Brandt, Mary Lutz, Tom Leahy, Duane Andresen, Kathleen Banar, and Rick Glaser.
Monitor Contact Information
The CFTC has posted on its website information regarding the restitution distribution process (see the CFTC’s Banc De Binary Litigation Case Study Report). In addition, the court-appointed Monitor, the National Futures Association, will post information and current updates regarding the case on its website (see NFA’s Banc De Binary Restitution Information).
The CFTC cautions customers that restitution orders may not result in the recovery of 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.
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See CFTC’s “RED” List Information
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.
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: March 9, 2016