The Commodity Futures Trading Commission (CFTC) has filed charges in federal court in Florida against eleven individuals and five entities for alleged fraud related to the sale of retail binary options. The scheme, active between September 2013 and December 2017, is accused of victimizing U.S. residents through misleading solicitations.
The CFTC alleges that the defendants created and distributed hundreds of millions of fraudulent communications, misrepresenting the potential for profit and the effectiveness of trading systems to entice customers into opening and funding binary options accounts. These accounts were directed to websites offering illegal, off-exchange binary options transactions.
Named in the complaints are Lee Atkinson, along with AIP, Passerino, and Gasher, against whom the CFTC sought a statutory restraining order, including asset freezes, record inspections, and the appointment of a temporary receiver. Additionally, Brookshire, Barrett, Stephenson, and Giacca were found liable through CFTC orders and are required to cease violations of anti-fraud provisions, disgorge ill-gotten gains, and cooperate with ongoing investigations.
The scheme operated through “affiliate marketing,” utilizing email solicitations and online promotional materials. The defendants allegedly lured prospective customers with false promises, and in some cases, recruited others to expand the fraudulent marketing network. The CFTC noted that several individuals cooperated with the investigation, resulting in reduced penalties compared to what they might have faced otherwise.
James McDonald, CFTC Director of Enforcement, emphasized the agency’s commitment to eradicating fraud from the markets and holding all involved parties accountable. He also highlighted the effectiveness of the agency’s cooperation program in identifying key wrongdoers and building strong cases.
The CFTC is seeking injunctions against the defendants, prohibiting them from engaging in further fraudulent activities. The orders against the respondents mandate cessation of violations, restitution of funds, and continued cooperation with the CFTC’s ongoing litigation and investigation.
Source: CFTC.gov
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