U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23481 / March 9, 2016
Securities and Exchange Commission v. Banc de Binary Ltd., et al. (United States District Court for the District of Nevada, Civil Action No. 2:13-CV-00993-RCJ-VCF)
The Securities and Exchange Commission today announced that a Cyprus-based company has agreed to pay $11 million to settle charges that it illegally sold binary options to U.S. investors. A judge signed a court order late yesterday authorizing the distribution of this money to harmed investors through a Fair Fund.
The SEC filed a complaint in 2013 against Banc de Binary Ltd, its founder Oren Shabat Laurent, and three affiliates, ET Binary Options Ltd., BO Systems Ltd. (now named Banc De Binary Limited), and BDB Services Ltd. Seychelles, alleging that they failed to register the offering before soliciting U.S. customers through YouTube videos, spam e-mails, and other Internet advertising. They failed to register as a broker-dealer before communicating directly with U.S. clients by phone, e-mail, and instant messenger chats.
Binary options differ from more conventional options contracts because the payout typically depends entirely on whether the price of a particular asset underlying the option will rise above or fall below a specified amount.
Banc de Binary, 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 filed a parallel action. The court has established a settlement fund, called a "Fair Fund," that will be administered by the National Futures Association (NFA) to compensate harmed investors. Banc de Binary, 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 settlement has been approved by the U.S. District Court for the District of Nevada.
The SEC's litigation was handled by John Berry and Amy Longo. The SEC appreciates the assistance of the CFTC.
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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.
Investors in Banc de Binary binary options who have questions about the settlement distribution should contact the National Futures Association at 800-621-3570, BDBRestitution@nfa.futures.org or http://www.nfa.futures.org/restitution/bdb.html. SEC enforcement staff on the case can be reached at LA4238@sec.gov.
For further information regarding this case, see Litigation Release Nos. 22718 (June 7, 2013), http://www.sec.gov/litigation/litreleases/2013/lr22718.htm, and 22767 (August 1, 2013), http://www.sec.gov/litigation/litreleases/2013/lr22767.htm.
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Final Judgment as to Defendant BO Systems Ltd. (Seychelles) (now named BdB Limited (Seychelles))
Final Judgment as to Defendant BdB Services Ltd. (Seychelles)