SEC impersonators scam fees from ex Banc de Binary clients due an $11 million settlement

The US Securities and Exchange Commission (SEC) today confirmed LeapRate’s earlier report (from February 26) that it had reached an $11 million settlement with unregistered binary options broker Banc de Binary.

However the SEC noted that some impersonators claiming to be affiliated with the SEC or other government agencies have recently been contacting harmed investors in the Banc de Binary case, asking them to pay a fee to facilitate their settlement payout.

The SEC’s Office of Investor Education and Advocacy today 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.

Banc de Binary provided a statement to LeapRate on the matter, as follows:

Banc De Binary is cooperating with the SEC and CFTC to find those responsible for these fraudulent solicitations. As the SEC stated: “It’s important for all investors to know that the SEC never makes people pay to get their money back.”

As far as the settlement itself goes, the $11 million payment by Banc de Binary is to settle charges that it illegally sold binary options to US investors. A judge signed a court order late yesterday authorizing the distribution of this money to harmed investors through a Fair Fund.

Banc de Binary settlementThe SEC filed a complaint in 2013 against Banc de Binary, its founder Oren Shabat Laurent, and three affiliates alleging that they failed to register the offering before soliciting US customers through YouTube videos, spam e-mails, and other Internet advertising.  They failed to register as a broker-dealer before communicating directly with US 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 Fair Fund that will be administered by the National Futures Association to compensate harmed investors.

As part of the settlement, 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.

Banc de Binary and its affiliates completely disregarded U.S. laws and registration requirements, and as a result they must surrender millions of dollars and be suspended from the industry,

according to Michele Layne, Director of the SEC’s Los Angeles Regional Office.

The SEC press release on the settlement can be seen here.


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