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Banc de Binary, a binary options broker recently targeted by the financial watchdogs of many countries, has reached an agreement with the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to pay more than $11 million in settlement in relation to accusations that it has illegally worked with US citizens and solicited large amounts, according to a Dow Jones article published on Thursday. The broker will pay $7.1 million in disgorgement and restitution, $2 million in civil penalties to the CFTC and $1.95 million in SEC civil penalties. As part of the settlement agreement, Oren Laurent, the broker’s founder, will pay $150,000.
Banc De Binary has decided on the settlement agreement after in 2013 it was sued by both the SEC and the CFTC. It has neither admitted nor denied the US regulators’ allegations.
From the settlement money, some $9.05 million will be used for the establishment of a fund, which will be used to repay harmed investors.
The US watchdogs say that within the 2011-2013 period Banc de Binary illegally signed up local citizens to its platform for binary options trading and took orders for forex, stocks and commodities instruments. The broker used on its website a New York address of a “virtual office” and presented it to US clients when communicating with them. By doing so, the broker had sidestepped a US ban on off-exchange binary options contracts.
According to the CFTC, Banc de Binary has solicited net deposits of $11 million from 6,614 US citizens.
In January this year, the Cyprus Securities and Exchange Commission (CySEC) reached an agreement with Banc de Binary, which falls under its regulation, for a €350,000 settlement with the broker over possible violation of the local regulations. According to the regulator, Banc de Binary has failed to comply with the commission’s requirements for authorization and has not informed clients about its services, risks, costs and charges that may occur.The CySEC said at the time Banc de Binary had already paid the amount.
In addition, the financial regulators of some countries, including Australia and New Zealand, have issued warnings against Banc De Binary for operating in their jurisdictions without the required authorization.
Banc De Binary holds a license issued by the CySEC, which allows it to offer its services to and target citizens of all EU member states.It offers via the website www.eu.bancdebinary.comtrading in binary options on more than 200 tradable assets, such as forex, stocks, commodities, and indices. It says on its website it serves retail and institutional clients in more than 100 countries.
Banc De Binary is affiliated to Belize-registered BDB Services, which operates Belize-registered but unregulated bancdebinary.com.
Earlier this week, the CFTC charged binary options broker Vision Financial Partners and its founder Neil Pecker for unlawfully obtaining about $3 million from their clients. the Florida District Court has ordered the freezing of the assets of the broker and its founder.
Source: Dow Jones