Chicago, IL – Yakov Cohen has been ordered to disgorge $7 million in ill-gotten gains for his role in a fraudulent binary options scheme, the Commodity Futures Trading Commission (CFTC) announced Monday. The United States District Court for the Northern District of Illinois entered a consent order requiring Cohen to relinquish the funds.
The action stems from a CFTC lawsuit filed August 12, 2019, against Cohen and co-defendants Yossi Herzog, Lee Elbaz, Shalom Peretz, Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Limited d/b/a BigOption, WSB Investments Ltd., d/b/a BinaryBook, and Zolarex Ltd., d/b/a BinaryOnline. The suit alleges a widespread fraud targeting individuals in the United States and internationally.
According to the court findings, from approximately March 2014 through September 2017, Cohen and his associates fraudulently solicited investments in binary options through websites operating under names like BigOption, BinaryBook, and BinaryOnline. They allegedly misrepresented their alignment with customer interests, profiting from client losses. The binary options were not genuine transactions tied to market conditions, but rather manipulated book entries, the CFTC claims.
The defendants are further accused of misrepresenting their expertise, compensation, location, and employee identities. They allegedly falsely claimed customer funds were held separately when they were commingled with company funds and transferred through offshore accounts controlled by Cohen. The scheme falsely advertised the profitability of the binary options, with approximately 95% of customers losing money.
In a parallel criminal case, Cohen was indicted in February 2019 by the United States Attorney for the District of Maryland on charges of wire fraud and conspiracy to commit wire fraud. He pleaded guilty and was sentenced on August 15th to 66 months in prison and ordered to pay a $7 million penalty. The $7 million in disgorged funds will be distributed to affected customers through a victim fund managed by the Department of Justice.
The CFTC acknowledged the assistance of international regulatory bodies, including the Australian Securities and Investments Commission, Financial Supervision Commission of Bulgaria, Central Bank of Hungary, and Israel Securities Authority, in the investigation.
Source: CFTC.gov
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