SEC Charges Banc de Binary with Acting as an Unregistered Broker-Dealer

Banc de Binary Ltd - Securities Lawyer 101The SEC filed a complaint in 2013 against Banc de Binary Ltd, its founder Oren Shabat Laurent, and three affiliates that operate an Internet-based based trading platform for “binary options.” One of these websites is www.bbinary.com.

The SEC’s complaint, filed on June 5, 2013 alleges that Banc de Binary Ltd and its co-defendants offered and sold binary options to investors across the U.S. without first registering the securities as required under the federal securities laws. The SEC’s second amended complaint also alleges that the defendants broadly solicited U.S. customers by advertising through YouTube videos, spam e-mails, and other Internet-based advertising; and their representatives communicated with investors directly by phone, e-mail, and instant messenger chats. The second amended complaint further alleges that the defendants acted as brokers when offering and selling these securities, but failed to register with the SEC as brokers as required under U.S. law.

On March 8, 2016, the SEC announced that the company agreed to pay $11.05 million to settle charges that it illegally sold binary options to U.S. investors. Banc de Binary Ltd, 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 had filed a parallel enforcement action against the same defendants. Banc de Binary Ltd, 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 district court entered final judgments on February 25, 2016 against Banc de Binary Ltd and it’s co-defendants, Oren Shabat Laurent, E.T. Binary Options Ltd. (Israel), BO Systems Ltd. (Seychelles) (now named BdB Limited (Seychelles), and BdB Services Ltd.(Seychelles). Those judgments ordered, among other things, that defendants pay disgorgement of $7.1 million and civil penalties totaling $1.95 million. These judgments were entered as part of a global settlement that resolved the SEC’s case against these defendants, as well as a parallel action filed by the CFTC.

As part of the settlement, a “Fair Fund” has been established to distribute the civil money penalties and disgorgement to U.S.-based investors. This fund is called the “Banc de Binary — Restitution Fund.” The district court granted the SEC’s motion to establish that fund on March 8, 2016. See the SEC’s motion which describes the plan for distributing this fund to harmed investors, and the court’s order approving the motion.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

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Brenda Hamilton, Securities Attorney
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