Washington, D.C. – On August 12, 2019, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Northern District of Illinois against Shahar Elbaz and three other individuals, along with five entities, alleging fraud related to a global binary options scheme targeting U.S. residents. The defendants operated through websites using names like BigOption, BinaryBook, and BinaryOnline.
The CFTC complaint alleges that from March 2014 through the present, the defendants fraudulently obtained over $103 million from individuals in the U.S. and internationally through their binary options trading scheme. They are accused of falsely representing that the offered binary options were legitimate transactions tied to market conditions, when in reality they were manipulated book entries designed to ensure customer losses.
The complaint further claims the defendants misrepresented their alignment with customer interests, while profiting directly from customer losses as they were on the opposite side of each trade. Approximately 95% of customers reportedly lost money, and the defendants allegedly falsely advertised the profitability of the binary options.
The CFTC alleges deceptive practices extended to the identity and expertise of the brokers soliciting customers, who used high-pressure sales tactics. An email from Shahar Elbaz to brokers, included in the complaint, reportedly encouraged aggressive sales techniques stating, “We are the money makers and no one can stop us!” and demanded brokers secure deposits, saying, “Either you sell the client or he sells you a reason he can’t deposit!”
To conceal their activities, the defendants allegedly established foreign entities and offshore bank accounts to transfer, conceal, and misappropriate customer funds. They also utilized manipulative tactics, such as offering “bonuses” and “risk-free” trades, and artificially altered trade outcomes to force customer losses. The CFTC is seeking to hold the defendants liable and prevent them from further violations. Penalties and amounts sought have not been specified in this release.
Source: CFTC.gov
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