Brooklyn resident Yehuda L. Belsky and his firm, Y Trading, LLC, are facing charges of solicitation fraud related to binary options trading, the Commodity Futures Trading Commission (CFTC) announced Wednesday. The civil enforcement action, filed in the U.S. District Court for the Eastern District of New York, also alleges Belsky made false statements to the CFTC and failed to register as a Commodity Trading Advisor.
According to the CFTC complaint, Belsky solicited at least $1,258,000 from at least 14 customers, claiming he would trade binary options on their behalf. However, the agency alleges Belsky misappropriated customer funds, had no trading accounts to execute trades, and concealed a prior CFTC order barring him from trading.
“The enforcement action filed today demonstrates the Commission’s continued commitment to root out fraud in our markets,” stated James McDonald, CFTC’s Director of Enforcement. He also emphasized the CFTC’s commitment to prosecuting violations of prior orders and false statements made to the agency. McDonald noted a parallel criminal proceeding was also filed Wednesday by the U.S. Attorney for the Eastern District of New York.
The complaint details that, from at least June 22, 2015, Belsky falsely presented himself as an experienced and profitable binary options trader. He allegedly deceived customers by providing fabricated account statements and using the alias “Jay Bell” to hide his identity. This isn’t Belsky’s first run-in with the CFTC; a 2008 order found Belsky and his previous company, Innovative Capital Management, LLC, committed a $1,250,000 fraud, falsified documents, and misappropriated funds. That order included permanent trading bans for both Belsky and Innovative.
The CFTC alleges Belsky violated the 2008 order by illegally accessing customer accounts and secretly trading their binary options. The agency is seeking full restitution for defrauded customers, disgorgement of any ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of commodities laws. The CFTC acknowledged the assistance of the U.S. Attorney for the Eastern District of New York and the Federal Bureau of Investigation in the ongoing investigation.
Source: CFTC.gov
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