LAS VEGAS, NV – March 9, 2016 – Oren Shabat Laurent of Israel has been ordered to pay $7.1 million in restitution and a $2 million civil penalty for defrauding U.S. customers through the illegal sale of off-exchange binary options. The judgment, issued by a federal court in Las Vegas, Nevada on February 26, 2016, also permanently bans Laurent and his associated companies – E.T. Binary Options, Ltd., Banc de Binary, Ltd., BO Systems, Ltd., and BDB Services, Ltd. – from offering or trading these options to U.S. customers.
The case originated from a CFTC complaint filed in June 2013 and amended in May 2014, alleging violations of the CFTC’s ban on off-exchange options trading. Laurent and his companies were accused of soliciting funds from U.S. customers for commodity option contracts, specifically binary options that allowed traders to speculate on whether an asset’s price would increase or decrease within a given timeframe.
The court found that Banc de Binary acted as the counterparty to customer transactions involving commodities like wheat, oil, gold, and stock indices. Crucially, the court determined that these customers were not eligible contract participants, meaning they were retail investors subject to regulations protecting them from risky off-exchange trading. This activity violated federal laws prohibiting such trades.
In a related action, the U.S. Securities and Exchange Commission (SEC) also reached a settlement with the defendants. Combined, the CFTC and SEC orders require Laurent and his companies to pay over $9 million to affected U.S. customers. The CFTC acknowledged the SEC’s cooperation, as well as assistance from securities regulators in Cyprus, Israel, Ontario, Switzerland, and the United Kingdom.
The CFTC cautions that restitution orders do not guarantee full recovery of lost funds, as the defendants may lack sufficient assets. Information regarding the restitution distribution process is available on the CFTC’s website, and updates will be posted by the National Futures Association, appointed as the court monitor in the case.
Source: CFTC.gov
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