CFTC Charges Three Individuals with Fraudulently Soliciting U.S. Customers in Binary Options Scheme

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CFTC

CFTC Charges Three Individuals with Fraudulently Soliciting U.S. Customers in Binary Options Scheme

October 3, 2019

CFTCWashington, DCThe U.S. Commodity Futures Trading Commission today issued three orders filing and simultaneously settling charges against three individuals who each fraudulently solicited customers in the United States to enter into illegal, off-exchange binary options Scheme transactions through internet websites using fictitious trade names such as “BinaryBook” and “BigOption.” The individuals are Liora Welles of California, Yair Hadar of Florida, and Shira Uzan of California.

All three individuals are former employees of Yukom Communications Ltd., an Israeli-based entity that the CFTC has charged, along with four other entities and four individuals, with operating an illegal and fraudulent $103 million global retail “binary options” trading enterprise that targeted and victimized U.S. residents.  [See CFTC v. Yukom Comm. Ltd, No. 1:19-cv-05416 (N.D. Ill.) and Release No. 7995-19]

Each respondent has entered into a formal cooperation agreement with the CFTC’s Division of Enforcement to provide information and testify in the Yukom litigation.

The orders provide for sanctions, including permanent trading bans and prohibitions on seeking registration with the CFTC.  Additionally, the orders require the respondents to cease and desist from violating the Commodity Exchange Act and Commission regulations as charged.

Related Criminal Action

Each of the individuals has also entered into plea agreements with the Department of Justice in parallel criminal proceedings.  On September 20, 2019, Welles was sentenced to 14 months imprisonment and ordered to pay restitution of $2,395,310 in customer losses. United States v. Welles, No. 8:18-cr-00613 (D. Md.).  Hadar was sentenced on September 23, 2019 to 8 months of imprisonment and ordered to pay restitution of $1,200,000. United States v. Hadar, No. 8:19-cr-00108 (D. Md.). Uzan is scheduled to be sentenced on October 24, 2019. United States v. Uzan, No. 8:18-cr-00608 (D. Md.).

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets.  The CFTC will continue to fight vigorously for the protection of customers to ensure wrongdoers are held accountable.

The CFTC thanks the U.S. Securities and Exchange Commission for their assistance in this matter.  The CFTC also thanks and acknowledges the assistance of the Australian Securities and Investments Commission, the Financial Supervision Commission of Bulgaria, the Central Bank of Hungary, and the Israel Securities Authority.

CFTC Division of Enforcement staff members responsible for this case are Elizabeth N. Pendleton, Heather Dasso, Stacie Pan, Elizabeth Streit, and Scott Williamson.

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CFTC’s Binary Options Customer Fraud Advisory

The CFTC has issued a Fraud Advisory regarding schemes involving binary options and their trading platforms. The advisory warns customers that the perpetrators of these unlawful schemes allegedly refuse to credit customer accounts, deny fund reimbursement, commit identity theft, and manipulate software to generate losing trades.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

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