Cleveland, OH – Jared J. Davis, formerly of Ohio, has been permanently banned from trading and soliciting after defrauding customers in a global binary options scheme, according to a consent order entered by the U.S. District Court for the Northern District of Ohio on April 27, 2023. The Commodity Futures Trading Commission (CFTC) filed the initial complaint against Davis on September 17, 2019.
Davis operated the fraudulent scheme from approximately July 2012 through June 2016, soliciting around $10 million from customers in the U.S. and abroad to trade off-exchange binary options. He utilized internet marketing, websites, and call centers under names like Option Mint, Option King, and Option Queen. The CFTC found that Davis misrepresented key facts to investors, failing to disclose he was taking the opposing side of each trade and manipulating the trading platforms to increase the likelihood of customer losses.
The consent order requires Davis to pay $561,971 in restitution to the victims of his fraud. He is also permanently prohibited from violating the Commodity Exchange Act and CFTC regulations, and barred from future registration and trading activities.
This case is connected to a separate criminal matter brought by the U.S. Attorney’s Office for the Northern District of Ohio. Davis pleaded guilty to 11 counts of wire fraud on behalf of his company, Erie Marketing, LLC, and three counts of tax evasion. He was sentenced to 30 months of incarceration, followed by three years of supervised release. In addition to the prison sentence, Davis was ordered to pay a $300,000 fine, $1,039,208 in restitution to the IRS, and is jointly liable for Erie Marketing’s debts, including $656,493.20 in victim restitution and a $4.4 million fine.
The U.S. Securities and Exchange Commission (SEC) also pursued enforcement action against Davis, reaching a partial settlement on February 22, 2019. The court will determine disgorgement and civil penalties in the SEC case, which remains ongoing. The CFTC worked in conjunction with the U.S. Attorney’s Office, the FBI’s Cleveland Field Office, and the IRS Criminal Investigation division throughout the investigation.
The CFTC notes that restitution orders do not guarantee full recovery of lost funds, as defendants may lack sufficient assets. The agency maintains its commitment to protecting customers and holding wrongdoers accountable.
Source: CFTC.gov
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