Cleveland, OH – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Jared J. Davis of Ohio, alleging a multi-million dollar fraud scheme involving off-exchange binary options trading. The complaint, filed in the U.S. District Court for the Northern District of Ohio on September 17, 2019, details how Davis allegedly defrauded customers out of at least $10 million between July 2012 and June 2016.
Davis operated the scheme through internet marketing, websites, and call centers using trade names including Option Mint, Option King, and Option Queen. According to the CFTC, Davis misrepresented key facts to customers, failing to disclose that he profited when his clients lost money – effectively taking the opposing position on every trade.
The complaint further alleges that Davis manipulated the trading platforms used by customers, adjusting software settings to artificially increase the likelihood of losses. These deceptive practices targeted investors in the United States and internationally, involving trades on commodities and foreign currencies (forex).
The CFTC is seeking full restitution for defrauded investors, along with disgorgement of any ill-gotten gains, civil monetary penalties, and a permanent ban from trading and registration. The agency cautions that recovery of funds may be limited, as wrongdoers may lack sufficient assets.
Davis also faces criminal charges in a related case brought by the U.S. Attorney’s Office for the Northern District of Ohio. A 22-count indictment accuses him of conspiracy to commit wire fraud, conspiracy to launder money, wire fraud, money laundering, obstruction of justice, and tax evasion. The Securities and Exchange Commission (SEC) has also filed a related enforcement action and entered into a partial settlement with Davis.
The CFTC collaborated with the U.S. Attorney’s Office, the FBI’s Cleveland Field Office, the IRS Criminal Investigation’s Cincinnati Field Office, and the SEC on this case. The CFTC’s Enforcement Division staff members Peter M. Haas, Danielle Karst, Jason Gizzarelli, Kyong G. Koh, Michael Amakor, and Paul G. Hayeck were responsible for the investigation.
Source: CFTC.gov
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