Washington, D.C. – The Commodity Futures Trading Commission (CFTC) has taken action against two affiliate marketers accused of promoting fraudulent binary options trading schemes. David Sechovich and Peter Szatmari are alleged to have disseminated millions of misleading solicitations to attract investors to unregistered brokers.
The CFTC issued an order settling fraud charges against Sechovich, requiring him to pay over $2.8 million in penalties and restitution. This includes returning more than $1.8 million to defrauded customers and a civil monetary penalty exceeding $949,000. Sechovich is also subject to trading and registration bans.
In a separate action, the Commission filed a civil enforcement action in the U.S. District Court for the District of Hawaii against Szatmari. These cases are connected to previous CFTC actions in Florida concerning similar fraudulent advertising practices.
According to the CFTC, Sechovich and Szatmari engaged in “affiliate marketing,” promoting binary options trading through emails and internet postings. They lured prospective customers with promises of automated trading software that would generate substantial profits with no risk. The marketing materials contained numerous false and misleading claims.
The CFTC alleges that neither Sechovich nor Szatmari disclosed they received fees from the brokers for each new funded account generated by their solicitations. This fee arrangement was their sole motivation for recommending specific brokers. Their fraudulent solicitations reached millions of potential customers, resulting in approximately 25,000 individuals opening and funding binary options accounts with initial deposits of $250 or more. The pair reportedly generated profits of at least $3.8 million.
The CFTC’s lawsuit against Szatmari seeks full restitution for defrauded investors, disgorgement of ill-gotten gains, a civil monetary penalty, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
The CFTC cautions that recovery of funds for victims is not guaranteed, as wrongdoers may lack sufficient assets. The agency stated its commitment to protecting customers and holding perpetrators accountable. The SEC assisted in the investigation.
Source: CFTC.gov
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