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Articles Posted in Commodities (CFTC)

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Boca-Raton-Oppenheimer-Employees-Settle-SEC-Investigation-300x208The CFTC, along with the Utah Department of Commerce, Division of Securities, through its Attorney General, jointly filed a civil enforcement action in the U.S. District Court for the District of Utah, Central Division. They filed against Gaylen Dean Rust and his business Rust Rare Coin (RRC). The complaint charges Rust and his company with committing fraud against approximately 200 individuals from Utah, and also from 16 other states. Rust allegedly obtained more than $170 million from investors since May 2013 in a precious metals ponzi scheme.

The complaint states that Rust’s fraudulent actions are ongoing. From January to August of 2018, Rust received $42 million from investors, which he claimed he used to buy and sell silver. He also allegedly attempted to solicit new investors recently.

On November 15, 2018, the U.S. District Court Judge for the District of Utah, Honorable Tena Campbell, entered a restraining order to freeze Rust’s assets and to permit the CFTC and State of Utah to inspect his records. Jonathan O. Hafen was appointed as a temporary receiver to take control of RRC and Rust’s assets.

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Fabio Bretas de Freitas of Miami, Florida, was arrested on fraud and identity theft charges for allegedly misappropriating more than $5.5 million. His potential convictions involve the two investment companies he managed; Phynance Capital Management LLC and Absolute Experience LLC.Fabio Bretas de Freitas of Miami, Florida, was arrested on fraud and identity theft charges for allegedly misappropriating more than $5.5 million. He also allegedly attempted to deceive federal regulators and he impersonated a victim-investor.

The 53-year-old was taken into custody on December 6 and was then scheduled to appear before a magistrate judge.

“The defendant obtained more than $5.5 million from people who invested their money in good faith. But as alleged, instead of investing those funds as he had promised, the defendant used it to cover his own personal expenses, even going so far as to impersonate one of his own victims to deceive investigators,” said William F. Sweeney Jr., the assistant director in charge of the New York Field Office of the FBI.  “Bretas’ arrest should serve as a stark reminder that those who seek to manipulate our financial systems for their personal gain will be identified and disrupted.”

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Class-Action-1-300x150-300x150A putative class of investors sued JPMorgan Chase & Co. and a group of precious metals traders employed by the bank in New York federal court Wednesday, saying they manipulated futures contracts through spoofing, days after the U.S. Department of Justice announced a former trader had pled guilty to his role in the alleged scheme.

The complaint accuses JPMorgan and its employees of manipulating the prices of precious metals futures contracts on the New York Mercantile Exchange and Commodity Exchange Inc. through a spoofing scheme where its traders would place orders for futures contracts with the intent to cancel those orders before execution, which would cause investors to buy and sell at artificial prices.

According to the complaint, JPMorgan, Edmonds and several unnamed employees orchestrated a scheme “to inject materially false and illegitimate signals of supply and demand into the market and … to induce other market participants to trade against” the orders that were placed by the defendants, which resulted in the investors trading at prices, quantities and times that they may have not traded at or during that timeframe.

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iStock-476534078-300x231OptionSellers.Com, operated by James Cordier and Michael Gross, promoted themselves as expert options traders able to manage money for retail investors promising they can produce consistent returns with limited risk.  From offices in Tampa, Florida, Cordier and Gross touted their book “The Complete Guide to Options Selling” claiming to know “how selling options can lead to stellar returns in bull and bear markets.”

Now, OptionSellers.Com website has gone dark, and INTL FCStone, the commodities firm which maintained the customer accounts and managed the risk for loans and margin, claims that many investors owes them millions of dollars.  Investors are wondering how INTL FCStone and OptionSellers.Com lost all the money.

While money was lost on naked options, investors allege that either OptionSellers.Com or INTL FCStone failed:

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iStock-476534078-300x231Silver Law Group has been retained by investors to pursue claims against INTL FCStone for losses related to OptionSellers.Com. Our clients allege that OptionSellers.Com used a web of deceptive marketing materials, misrepresentation and deception to promote a speculative trading strategy which resulted in devastating losses.  INTL FCStone allegedly allowed OptionSellers.Com to trade customer accounts including IRA accounts on margin or purchase naked options which caused losses greater than their principal investment. Further allegations relate to FCStone’s knowledge of OptionSellers’ activities and misrepresentations.

In late November 2018, OptionSellers.Com and INTL FCStone informed investors that despite previous representations regarding the safety and security of their investments, many investors had lost almost all of their investment and many investors owed additional margin calls.  James Cordier has offered his victims a video apology, but many investors are shocked to learn about his regulatory history and lack of institutional knowledge regarding options trading.

Our Experienced Commodities Fraud Attorneys 

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It seemed like a great investment, in natural gas. But like many energy-based investments, there is a considerable volatility involved that’s an uncontrollable variable. In other words, you never know what may happen tomorrow, especially when trading options or using leverage.

Natural gas posted its biggest one-day percentage gain on November 14. The next day, it posted its largest one-day drop in 15 years. According to news stories, OptionSellers.com was betting that natural gas would continue to rise. When it didn’t, everything unraveled, and the company was forced to begin liquidation. Many investors borrowed through margin accounts, some with considerable amounts invested.

Margin-Account-Guidelines-300x200Tampa, FL-based OptionSellers.com was a commodities trading firm that claimed to be experienced in this type of investment. The firm’s president and head trader, James Cordier, told a recent interviewer, “Our goal is to take an aggressive vehicle and manage it conservatively.” Unfortunately, that’s not exactly what happened. Trading “naked” on margin instead of “covered,” the firm left its investors vulnerable to unlimited exposure, leading to the losses. An article explains that “OptionSellers.com and its principals negligently engaged in a risky trading strategy that was unsuitable for its clients and breached its fiduciary duties to them by putting its interests ahead of its clients.”

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https://www.silverlaw.com/blog/wp-content/uploads/2017/07/FINRA-Permanently-Bars-Honetta-C.-Kao-After-Allegations-of-Unauthorized-Trading-and-Mishandled-Accounts-300x200.jpgThe Commodity Futures Trading Commission (CTFC) filed orders today that brought and settled cases against two commodities firms engaged in unauthorized trading and two traders attempting to manipulate commodity prices.

In the first case, Iowa-based Kooima & Kaemingk Commodities, Inc. (K&K), Lauren Kaemingk (Kaemingk), and Bradley Kooima (Kooima) were charged with:

  • Fraud
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Our investment fraud attorneys help victims of precious metal and exotic diamond frauds by con artists who promise quick profits from investing in rare diamonds or other exotic gems. Investors should be wary of any aggressive sales tactics or violations of state or federal securities laws.Bahram-Mirhashemi-Facing-Allegations-of-Elder-Financial-Fraud-300x200-300x200

Possible Fraudulent Sales Pitch Include: 

  • Current news already known to the public such as:
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Binaryoptionfraudattorneys.com

CFTC’s RED List

Binary Options fraud is on the rise in recent years as regulators and government agencies continue to receive hundreds of complaints with damages totaling in the millions of dollars in the United States alone. The U.S. Commodity Futures Trading Commission (“CFTC”) has issued a Fraud Advisory concerning Binary Options due to the increased number of victims of these schemes. The CFTC, as part of its efforts to reduce this fraudulent activity, maintains a list of foreign entities that illegally solicit U.S. residents to trade binary options and forex without being registered with the CFTC as required by securities laws. This allows investors to protect themselves against this type of illegal activity.

CFTC and Designated Contract Markets

It is illegal for entities to solicit, accept offers, offer to or enter into commodity options transactions with US persons, unless those options transactions are conducted on a designated contract market. This includes contracts for foreign currencies and metals just to name a few. To determine whether an entity/platform is a designated contract market, you can check the CFTC’s website.

While some binary options are listed and traded on registered exchanges, the majority of binary options trade via Internet-based trading platforms that do not necessarily comply with U.S. regulatory requirements. This means that in addition to the risks associated with the purchase or sale of binary options, there is a higher risk of fraud based upon the unregulated online trading platforms they use.

The internet-based trading platforms typically used for trading binary options allow perpetrators of binary option fraud to find their victims on the internet. These websites are usually operated by individuals overseas and these companies go to great lengths to get investors. Once an investor sends money to the platform it is unlikely that he/she will ever see that money back from the fraudsters.

The individuals operating these platforms usually find a way to keep the investor’s money. Whether by changing the terms of the binary option so as to make it a “losing” bet or by simply placing a freeze on the account when the investor tries to make a withdrawal, the only thing that is certain is that investors will not be getting that money back from the fraudsters.

Due to the overseas operations of most of these trading platforms, bringing the criminals to justice and getting investor funds back is usually very difficult. However, our law firm looks at all potential responsible parties for recovery.

CFTC’s RED List

The CFTC has created a list of foreign entities that illegally solicit U.S. resident to trade in binary options and forex. It is called the “RED List” which stands for “Registration Deficient.” These entities are required to be registered with the CFTC in order to solicit and accept funds from U.S. retail investors for trading in binary options and forex.

The RED List can be found at: www.SmartCheck.gov/REDList.

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2 Options Capital Bank Markets Inside Option RealForex.com
33Option Capital Trade House Instant Options Regal Options
AAFX Trading Cherry Trade Int’l Brokers Assn Mkts RidgeWood Securities
Advanced Options Copyprofitshare.com Ivory Option Royal Binary
Allgo Trading CT Option Janus Options Safe Options
Anthony, John Diamond Managed Forex Land-FX Scion Forex
AOS Holding Eagle Gate Lbinary Spot Fn
ASK Options Empire Options London Binary Option Starling Capital
Azbinary Finpari Market Options Stichting WST Capital
Banc de Options FinPro Trading MarketsWorld Tall Options
Barclays Broker Forex Broker Inc. MercerFX Tallinex
Barkley Capital Forex CBR MFX Brokers Titan Trade
Bartle Investment Group Forex Goptions.com Morton Finance Trade Quicker
BeeOptions Forex Investment Services NRG Binary Trader’sway
Big Option Forex Ltd. Omega Options Trades Capital
Binary Book Forex Ukraine Option Giants TradeThunder
Binary Das Forex-metal.com Option King TradeWiseFX
Binary Int’l FX Choice.com Option-World UK Options
BinaryRoom365 FX Moneyworld Optionprime.com uTrader
Binex Markets FXT Swiss Options24hours Vision Binary
BitVC FXUmarkets Optionsxo Weathika
Bloombex Options GFM Trader Oracle Stone Win Forex Trade
BoursoPro Glenridge Capital GMR Pamm-Mam Forex Fund Management WinOptions
BoursoTrade Golden Tangent Holdings Planet Option Wynn Finance
BTG Option GT Options Profit Forex YesOption

Have you been a victim of Binary Option Fraud?

The Silver Law Group can help you bring a claim against all of the responsible parties to help you recover your losses. If an investor suffers losses as a result of binary option fraud they may still be able recover their losses from those that facilitate the fraud. Contact  the Silver Law Group today at ssilver@silverlaw.com or call us toll free at (855) 755-4799. You can also fill out the form on this page and one of our attorneys will contact you.

Published on:

Binaryoptionlosses.com

Binary Options Fraud

Binary Options fraud is on the rise in recent years as regulators and government agencies continue to receive hundreds of complaints with losses totaling in the millions of dollars in the United States alone. The U.S. Commodity Futures Trading Commission (“CFTC”) has issued a Fraud Advisory concerning Binary Options due to the increased number of victims of these schemes. The CFTC is hoping to educate investors in order to prevent them from falling victim to these schemes.

What are Binary Options?

Binary options are essentially betting contracts. A binary option is a type of option contract in which the payout is “all or nothing” depending on the outcome of a yes/no proposition.  The contract specifies a return depending on the price of the underlying asset at a particular date and time. For example: 10% return if the price of ABC stock is above $9.37 at 4pm on December 1st 20xx. If the answer is yes you get the promised return and if the answer is no you get nothing.

The term “option” in binary option is misleading. Unlike the traditional option contracts that give the investor the right to exercise the option and purchase or sell the underlying asset, binary options do not give investors any “option.” Binary option contracts are automatically exercised at expiration and either give the investor the predetermined return or nothing at all. There is no right or obligation to purchase or sell the underlying asset.

Differences Between Traditional Options and Binary Options

Binary options are very different from traditional option contracts. While option contracts are generally well known investment products with known risks and trade on established trading exchanges, binary options differ significantly in associated risks and trading. While some binary options are listed and traded on registered exchanges, the majority of binary options trade via Internet-based trading platforms that do not necessarily comply with U.S. regulatory requirements. This means that in addition to the risks associated with the purchase or sale of binary options, there is a higher risk of fraud based upon the unregulated online trading platforms they use.

CFTC and Designated Contract Markets

It is illegal for entities to solicit, accept offers, offer to or enter into commodity options transactions with US persons, unless those options transactions are conducted on a designated contract market. This includes contract for foreign currencies and metals just to name a few. To determine whether an entity/platform is a designated contract market, you can check the CFTC’s website.

The internet-based trading platforms typically used for trading binary options allow perpetrators of binary option fraud to find their victims on the internet. These websites are usually operated by individuals overseas and these companies go to great lengths to get investors. Once an investor sends money to the platform it is unlikely that he/she will ever see that money back from the fraudsters.

The individuals operating these platforms usually find a way to keep the investor’s money. Whether by changing the terms of the binary option so as to make it a “losing” bet or by simply placing a freeze on the account when the investor tries to make a withdrawal, the only thing that is certain is that investors will not be getting that money back from the fraudsters.

Due to the overseas operations of most of these trading platforms, bringing the criminals to justice and getting investor funds back is usually very difficult. However, our law firm looks at all potential responsible parties for recovery.

CFTC’s RED List

The CFTC has created a list of foreign entities that illegally solicit U.S. resident to trade in binary options and Forex. It is called the “RED List” which stands for “Registration Deficient.” These entities are required to be registered with the CFTC in order to solicit and accept funds from U.S. retail investors for trading in binary options and forex.

The RED List can be found at: www.SmartCheck.gov/REDList.

1Billion Forex Byrix Financial Investments Ihoptions Profitable Forex Advisors
2 Options Capital Bank Markets Inside Option RealForex.com
33Option Capital Trade House Instant Options Regal Options
AAFX Trading Cherry Trade Int’l Brokers Assn Mkts RidgeWood Securities
Advanced Options Copyprofitshare.com Ivory Option Royal Binary
Allgo Trading CT Option Janus Options Safe Options
Anthony, John Diamond Managed Forex Land-FX Scion Forex
AOS Holding Eagle Gate Lbinary Spot Fn
ASK Options Empire Options London Binary Option Starling Capital
Azbinary Finpari Market Options Stichting WST Capital
Banc de Options FinPro Trading MarketsWorld Tall Options
Barclays Broker Forex Broker Inc. MercerFX Tallinex
Barkley Capital Forex CBR MFX Brokers Titan Trade
Bartle Investment Group Forex Goptions.com Morton Finance Trade Quicker
BeeOptions Forex Investment Services NRG Binary Trader’sway
Big Option Forex Ltd. Omega Options Trades Capital
Binary Book Forex Ukraine Option Giants TradeThunder
Binary Das Forex-metal.com Option King TradeWiseFX
Binary Int’l FX Choice.com Option-World UK Options
BinaryRoom365 FX Moneyworld Optionprime.com uTrader
Binex Markets FXT Swiss Options24hours Vision Binary
BitVC FXUmarkets Optionsxo Weathika
Bloombex Options GFM Trader Oracle Stone Win Forex Trade
BoursoPro Glenridge Capital GMR Pamm-Mam Forex Fund Management WinOptions
BoursoTrade Golden Tangent Holdings Planet Option Wynn Finance
BTG Option GT Options Profit Forex YesOption

Have you been a victim of Binary Option Fraud?

The Silver Law Group can help you bring a claim against all of the responsible parties to help you recover your losses. If an investor suffers losses as a result of binary option fraud they may still be able recover their losses from those that facilitate the fraud. Contact  the Silver Law Group today at ssilver@silverlaw.com or call us toll free at (855) 755-4799. You can also fill out the form on this page and one of our attorneys will contact you.

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