A U.S. District Court in Hawaii has entered a default judgment against Peter Szatmari for perpetrating a fraudulent binary options scheme, the Commodity Futures Trading Commission (CFTC) announced. The judgment, filed on September 14, 2020, requires Szatmari, formerly of Hawaii, to pay over $13.8 million.
The order, adopted by Judge Derrick K. Watson on August 13, 2020, following recommendations from Magistrate Judge Kenneth J. Mansfield, includes approximately $6.25 million in restitution to defrauded customers, $1.9 million in disgorgement, and a $5.7 million civil monetary penalty. Szatmari is also permanently prohibited from violating the Commodity Exchange Act, registering with the CFTC, and trading on CFTC-regulated markets.
The case stems from a CFTC enforcement action filed on October 7, 2019, alleging that Szatmari and an accomplice used fraudulent solicitations to entice roughly 25,000 customers to open and fund binary options trading accounts. These accounts generated $3.8 million in fees for Szatmari and his partner, while customers largely lost their investments.
According to the CFTC complaint and subsequent findings, Szatmari specialized in affiliate marketing, promoting binary options trading through online solicitations. He and his partner falsely advertised free access to automated trading software promising substantial profits with minimal risk. Their marketing materials featured actors portraying satisfied users and showcased fabricated trading results. The court found that Szatmari knowingly misrepresented the software’s functionality and the likelihood of customer profits.
The CFTC cautions that victims may not fully recover their losses due to potential limitations in the defendant’s assets. The agency pledges continued efforts to protect customers and hold perpetrators accountable. The SEC provided assistance in the investigation.
Allison V. Passman, Joseph Patrick, and Scott R. Williamson of the CFTC’s Division of Enforcement, along with former staff members Camille M. Arnold, Stephanie Reinhart, and Susan J. Gradman, were responsible for the case.
The CFTC and SEC have jointly issued an investor alert warning about fraudulent schemes involving binary options and trading platforms, highlighting potential risks such as account credit refusal, fund reimbursement denial, identity theft, and software manipulation.
Source: CFTC.gov
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