SEC Obtains Fraud Judgments Against Israeli Owners of Binary Options Brokers
Litigation Release No. 24879 / August 31, 2020
Securities and Exchange Commission v. Anton Senderov & Lior Babazara, No. 4:19-cv-05242-RMP (E.D. Wash.)
On August, 27, 2020, the U.S. District Court for the Eastern District of Washington entered final consent judgments against two Israeli citizens for allegedly selling unregistered securities and for controlling entities and individuals that fraudulently offered, sold, and facilitated trading in binary options.
According to the SEC's complaint, filed on October 9, 2019, between January 2014 and August 2017, Anton Senderov and Lior Babazara owned, controlled, and operated LianTech Finance Marketing, Ltd., an Israeli company that marketed "binary options," high-risk financial instruments that expire at a predetermined time, with potential payouts contingent on the future value of an underlying asset. According to the complaint, Senderov and Babazara, through LianTech, controlled and operated two internet-based binary options brokers, LBinary/Live Binary and Ivory Option, which offered and sold binary options to thousands of U.S. investors and provided investors a binary options trading platform. The complaint alleged that the LBinary and Ivory Option websites contained false and misleading statements, and that LianTech employees engaged in deceptive practices, resulting in retail investors depositing millions of dollars into trading accounts at the firms. The complaint also alleged that LianTech, LBinary, and Ivory Option never registered the sales of binary options with the SEC, and that neither those firms, nor Senderov and Babazara, registered with the SEC as a broker.
Without admitting or denying the allegations, Senderov and Babazara agreed to jointly-and-severally pay $560,000 in disgorgement and prejudgment interest, and each agreed to pay a $350,000 civil penalty. Senderov and Babazara consented to injunctions against further violations of the securities registration provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Senderov and Babazara also consented to injunctions against selling binary options in the United States.
The SEC's investigation was conducted by Jason Anthony, Michael Fuchs, and Deborah Maisel, with supervision from Jennifer Leete. The litigation was conducted by Christian Schultz and David Nasse, with supervision from Fred Block.