Release Number 8877-24

Federal Court Orders Binary Options Firm and Owners to Pay Over $204 Million in Monetary Sanctions for Fraudulent Binary Options Scheme

March 14, 2024

— The Commodity Futures Trading Commission today announced the U.S. District Court for the Western District of Texas entered an order of final judgment against Jonathan Cartu, Leeav Peretz, Nati Peretz, all believed to be residents of Israel, and Blue Moon Investments Inc., a Seychelles corporation. The order finds them liable for offering illegal, off-exchange binary options and committing fraud in connection with the illegal offering. This resolves the CFTC’s September 2, 2020 case against the defendants. [See CFTC Press Release No. 8231-20]

The court’s order of default judgment and permanent injunction prohibits the defendants from engaging in conduct that violates the Commodity Exchange Act (CEA); orders them to pay $51,155,645 in disgorgement, jointly and severally; and a civil monetary penalty of $153,466,935. The order also permanently bans the defendants from registering with the CFTC and from trading on any registered entity.

Case Background

The order finds that beginning approximately September 26, 2015, the defendants offered illegal, off-exchange binary options via an internet platform they operated and maintained. The order further finds the defendants not only made material misrepresentations to customers and potential customers concerning the level of risk of binary options, but also manipulated the results of some trades to force customer losses and generate profits for themselves. The order finds through this fraudulent scheme, the defendants fraudulently obtained more than $51,155,645 from customers in the United States.

The CFTC thanks and acknowledges the assistance of the U.S. Securities and Exchange Commission, Ontario Securities Commission, Australian Securities and Investments Commission, International Financial Services Commission of Belize, Cyprus Securities and Exchange Commission, Federal Financial Supervisory Authority of Germany, Central Bank of Ireland, Israel Securities Authority, Malta Financial Services Authority, Swiss Financial Market Supervisory Authority FINMA, and the United Kingdom Financial Conduct Authority.

The Division of Enforcement staff responsible for this case are Ben Sedrish, Sincere Belton, Heather Dasso, Stacie Pan, Elizabeth N. Pendleton, Elizabeth Streit, Scott R. Williamson, and Robert T. Howell.

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Fraud Advisory

The CFTC’s Office of Customer Education and Outreach and the SEC’s Office of Investor Education and Advocacy have issued a joint investor alert to warn about fraudulent schemes involving binary options and their trading platforms. The alert warns customers that the perpetrators of these unlawful schemes may refuse to credit customer accounts, deny fund reimbursement, commit identity theft, and manipulate software to generate losing trades.

The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company. A company’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the CFTC Whistleblower Office. Whistleblowers may be eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.