Washington, D.C. – On September 14, 2018, the Commodity Futures Trading Commission (CFTC) filed charges and simultaneously settled with eight unregistered entities and eight individuals accused of illegally offering foreign exchange (forex) and binary options to retail investors in the United States. The CFTC alleges these operations targeted inexperienced investors, including millennials, through apps, websites, and social media.
James McDonald, Director of the CFTC’s Division of Enforcement, emphasized the importance of registration, stating that registered entities are subject to safeguards protecting customers from fraud and abusive practices. He warned that unregistered entities offer no such guarantees and violate federal law by failing to register with the CFTC.
While the press release lists eight companies and eight individuals, only James McDonald’s name is provided as a person. The charges center around offering unregistered forex and binary options, a practice the CFTC says puts investors at significant risk. The CFTC did not specify the exact penalties for James McDonald in the release, but indicated the settlement included charges against him for violating the Commodity Exchange Act.
The CFTC urges the public to verify a company’s registration status before investing, utilizing the SmartCheck website (https://www.smartcheck.gov/). The agency also provides fraud advisories for both forex and binary options trading, highlighting warning signs of potential scams. Investors are encouraged to report suspicious activity through the CFTC’s toll-free hotline (866-FON-CFTC) or online complaint form.
The investigation received assistance from the Financial Supervision Commission of Bulgaria and the Utah Division of Securities. Paul G. Hayeck, Timothy J. Mulreany, and several other CFTC staff members were responsible for the case.
Source: CFTC.gov
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