The US Commodity Futures Trading Commission announced that the court found Peter Szatmari, formerly of Hawaii, fraudulently solicited US residents to open binary options trading accounts. The court ordered Szatmari to pay over $13.8 million in connection with the fraud.
Szatmari is required to pay $6.25 million in restitution to defrauded customers, $1.9 million in disgorgement and a civil monetary penalty of $5.7 million. Additionally, Szatmari is permanently prohibited from engaging in conduct that violates the Commodity Exchange Act, registering with the CFTC and trading in any CFTC-regulated markets.
The order also resolves a CFTC enforcement case from October 2019, which found that Szatmari and a business partner created and disseminated fraudulent solicitations that led 25,000 customers to open and fund trading accounts that generated $3.8 million in fees for Szatmari and his partner, while customers lost most or all of their funds.
The CFTC complaint states that Szatmari specialized in “affiliate marketing,” a form of performance-based marketing that promotes third-party products or services, such as binary options trading and is typically conducted through solicitations that the affiliate marketer emails to recipients and/or posts on the internet.
The investigation found that Szatmari and his partner fraudulently solicited customers into opening and funding binary option accounts on websites operated by unregistered, off-exchange brokers while pitching free access to automated trading software which claimed to generate significant profits with little to no risk of loss. They featured actors pretending to be actual owners or users of the trading software and depicted fictitious trading results as real as part of their marketing campaigns. The court also found that Szatmari knew that the solicitations were false and misleading, that the software did not work as claimed and that customers were unlikely to make a profit.
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