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Vault Options and Global Trader 365 Fined $4.5m

Vault Options and Global Trader 365 FinedAnother day, another two Israeli-based binary options firms incur the wrath of a financial regulator or overseas law court

Vault Options and Global Trader 365 fined more than $4.5m for unlawful off-exchange binary options trading, fraud, and registration violations.

To be exact:

‘The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge John Z. Lee of the U.S. District Court for the Northern District of Illinois entered an Order of Final Judgment by Default (Order) that requires Defendants Vault Options, Ltd. (Vault) and Global Trader 365 (GT 365), two Israeli web-based binary options firms, to jointly and severally pay a $3 million civil monetary penalty and $1,587,731 in restitution to their defrauded customers. The Court’s Order also imposes permanent injunctions and permanent trading bans against the two entities.’

The Order follows from a CFTC complaint filed on the 2nd February 2016 that both binary options providers violated the Commodity Exchange’s Act which bans off-exchange options trading by offering to US customers binary commodity option contracts.

The Findings

More importantly the Order finds that Vault Options and Global Trader 365 defrauded their customers by making false representations in their solicitations, and most importantly, misappropriated their funds, i.e stole their money in ‘layman speak’.

The two companies “….solicited and accepted at least $1.6 million from U.S. customers from 22 states….”.

Other finds against the companies include:

  • “…..knowingly or recklessly claiming that customers can make large profits…..”,
  • “…..falsely represented to customers that their funds were insured(!) against losses…”,
  • “…..failed to respond to customer enquiries about the status of their funds….”, and
  • “…..operated as Futures Commission Merchants…..”

The press release goes on to say that the victims might not be reimbursed their funds as the ‘wrongdoers’ might not have the money to repay them. This conveniently sidesteps the real issue here. Throughout the Order no mention of who the wrongdoers actually are is mentioned. The unpalatable fact is that probably the only people who know who these characters are are the wrongdoers themselves.

ISC, CySEC & OSC

The press release goes on to thank the Israeli Securities Authority, CySEC and the Ontario Securities Commission:

  • Thanking the Israeli Securities Commission is a joke in itself. This commission has banned the Tel Aviv binary options operators from accepting Israeli clients but have given them carte blanche to peddle their fraudulent activities overseas. In effect the are saying: “Don’t steal from Israelis but its OK for you to steal from foreigners”. So much for the reputation of Israel.
  • On the other hand, CySEC themselves have given these fraudulent operators a veneer of respectability by providing them with EU-wide financial regulation.
  • Ontario Securities Commission have a clean bill of health but one suspects they’re also as much in the dark as to who the real perpetrators of these crime are.

Collecting the Fine

Good luck to ever gets lumbered with this job! Both of the sites urls are for sale and one suspects the proprietors have left little trail as to where.

 

 

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