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A federal court in Ohio has ordered Jared Davis, the mastermind of a $10 million binary options scam, to pay $561,971 in restitution to defrauded victims. Davis operated the fraudulent binary options brands Option Mint, Option King and Option Queen between 2012 and 2016 under Erie Marketing, LLC.
The Commodity Futures Trading Commission (CFTC) announcement
the court order on Friday, noting that the former Ohio resident was also hit with permanent registration and trade bans. Judgment comes after an action in September 2019 against Davis filed by the US derivatives market watchdog.
Separately, Davis also pleaded guilty to three counts of personal tax evasion and 11 counts of wire fraud on behalf of his company, Erie Marketing, following charges brought by U.S. prosecutors in the Northern District of Ohio.
In the statement of CFTC, the regulator noted that Davis earlier in January was sentenced to 30 months in prison and three years of probation. Alongside his business, the binary options trader has also been hit with multiple other monetary penalties, with expected payouts now totaling around $7 million.
“He was also ordered to pay a fine of $300,000, $1,039,208 in restitution to the Internal Revenue Service (IRS) and to be jointly and severally liable for the debts of Erie Marketing, LLC, including 656,493, $20 in restitution to the victims and a fine of $4.4 million. “, explained the CFTC, detailing the other sanctions.
On the other hand, the Securities and Exchange Commission case against Davis remains pending, the CFTC said. The securities regulator in February 2019 had reached a partial settlement with Davis based on terms that the court will “determine reimbursement and civil penalties at a later date.”
How Davis ran the $10 million scam: CFTC
According to the CFTC, Davis carried out the scam by deploying internet and website marketing campaigns as well as call center operators. His activities targeted investors in the United States and other countries, touting off-exchange binary options trading opportunities in commodities, forex, stocks and indices.
However, the binary options executive had other plans as he was making “misrepresentations” and hiding “material facts” about trading activities from investors. For example, he failed to disclose that he “effectively took the opposite positions on every trade,” the CFTC said, adding that Davis frequently manipulated the settings of his options trading software behind the scenes in order “to increase the risk of customer losses”.
Meanwhile, David Butler, the operator of binary options companies, SpotFN and Binary FN, recently pleaded guilty to defrauding investors of $2.9 million through binary options schemes. Additionally, California-based John Black and its affiliates have recently been slapped with over $29 million in restitution and sanctions.
A federal court in Ohio has ordered Jared Davis, the mastermind of a $10 million binary options scam, to pay $561,971 in restitution to defrauded victims. Davis operated the fraudulent binary options brands Option Mint, Option King and Option Queen between 2012 and 2016 under Erie Marketing, LLC.
The Commodity Futures Trading Commission (CFTC) announcement
the court order on Friday, noting that the former Ohio resident was also hit with permanent registration and trade bans. Judgment comes after an action in September 2019 against Davis filed by the US derivatives market watchdog.
Separately, Davis also pleaded guilty to three counts of personal tax evasion and 11 counts of wire fraud on behalf of his company, Erie Marketing, following charges brought by U.S. prosecutors in the Northern District of Ohio.
In the statement of CFTC, the regulator noted that Davis earlier in January was sentenced to 30 months in prison and three years of probation. Alongside his business, the binary options trader has also been hit with multiple other monetary penalties, with expected payouts now totaling around $7 million.
“He was also ordered to pay a fine of $300,000, $1,039,208 in restitution to the Internal Revenue Service (IRS) and to be jointly and severally liable for the debts of Erie Marketing, LLC, including 656,493, $20 in restitution to the victims and a fine of $4.4 million. “, explained the CFTC, detailing the other sanctions.
On the other hand, the Securities and Exchange Commission case against Davis remains pending, the CFTC said. The securities regulator in February 2019 had reached a partial settlement with Davis based on terms that the court will “determine reimbursement and civil penalties at a later date.”
How Davis ran the $10 million scam: CFTC
According to the CFTC, Davis carried out the scam by deploying internet and website marketing campaigns as well as call center operators. His activities targeted investors in the United States and other countries, touting off-exchange binary options trading opportunities in commodities, forex, stocks and indices.
However, the binary options executive had other plans as he was making “misrepresentations” and hiding “material facts” about trading activities from investors. For example, he failed to disclose that he “effectively took the opposite positions on every trade,” the CFTC said, adding that Davis frequently manipulated the settings of his options trading software behind the scenes in order “to increase the risk of customer losses”.
Meanwhile, David Butler, the operator of binary options companies, SpotFN and Binary FN, recently pleaded guilty to defrauding investors of $2.9 million through binary options schemes. Additionally, California-based John Black and its affiliates have recently been slapped with over $29 million in restitution and penalties.
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