Banc de Binary Ltd
SEC v. Banc de Binary Ltd et al., Case No. 2:13-cv-00993-RCJ-VCF (D. Nev.)
The SEC filed a complaint in 2013 against Banc de Binary Ltd, its founder Oren Shabat Laurent, and three affiliates that operate an Internet-based based trading platform for “binary options.” One of these websites is www.bbinary.com.
The SEC's complaint, filed on June 5, 2013 and amended on January 16, 2014 and March 11, 2014, alleges that Banc de Binary Ltd and its co-defendants offered and sold binary options to investors across the U.S. without first registering the securities as required under the federal securities laws. See the Commission’s second amended complaint. The SEC’s second amended complaint also alleges that the defendants broadly solicited U.S. customers by advertising through YouTube videos, spam e-mails, and other Internet-based advertising; and their representatives communicated with investors directly by phone, e-mail, and instant messenger chats. The second amended complaint further alleges that the defendants acted as brokers when offering and selling these securities, but failed to register with the SEC as brokers as required under U.S. law.
On March 8, 2016, the Securities and Exchange Commission announced that the company agreed to pay $11.05 million to settle charges that it illegally sold binary options to U.S. investors. Banc de Binary Ltd, Laurent, and the affiliates agreed to jointly pay $7.1 million in disgorgement and $1.95 million in penalties to the SEC, as well as $2 million in penalties to the Commodity Futures Trading Commission (CFTC), which had filed a parallel enforcement action against the same defendants. Banc de Binary Ltd, Laurent, and the affiliates also agreed to be suspended from the securities industry for a year and permanently barred from issuing any penny stock offerings.
The district court entered final judgments on February 25, 2016 against Banc de Binary Ltd and it’s co-defendants, Oren Shabat Laurent, E.T. Binary Options Ltd. (Israel), BO Systems Ltd. (Seychelles) (now named BdB Limited (Seychelles), and BdB Services Ltd. (Seychelles). Those judgments ordered, among other things, that defendants pay disgorgement of $7.1 million and civil penalties totaling $1.95 million. These judgments were entered as part of a global settlement that resolved the SEC’s case against these defendants, as well as a parallel action filed by the CFTC.
As part of the settlement, a “Fair Fund” has been established to distribute the civil money penalties and disgorgement to U.S.-based investors. This fund is called the “Banc de Binary — Restitution Fund.” The district court granted the SEC’s motion to establish that fund on March 8, 2016. See the SEC’s motion which describes the plan for distributing this fund to harmed investors, and the court’s order approving the motion.
The district court appointed the National Futures Association (NFA) as the administrator of the “Banc de Binary — Restitution Fund.”
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The SEC has become aware of some impersonators claiming to be affiliated with the SEC or other government agencies who have contacted harmed investors in this Banc de Binary case and asked them to pay a fee to facilitate their settlement payout. It’s important for all investors to know that the SEC never makes people pay to get their money back. The SEC’s Office of Investor Education and Advocacy has issued an Investor Alert warning investors about phony communications that may appear on official-looking documents purportedly from the SEC offering paid legal services to investors who are fraud victims. Read the investor alert for more information about how to avoid these scams. The SEC’s Office of Inspector General (OIG), investigates matters involving SEC programs and operations; for more information investors can visit the OIG’s website https://www.sec.gov/oig, call the toll free hotline at (877) 442-0854, or utilize the link at https://iwf.tnwgrc.com/secoig/InternationalSplashPage/tabid/183/language/en-US/Default.aspx to submit an online hotline complaint.