The US Securities and Exchange Commission (SEC) hit affiliate marketers related to binary options schemes with record fines this year. They imposed these individuals with over $60 million in fines as three US-based binary options marketers bore the brunt of the action.
Marketing binary options was a problem
Jay Passerino, a former business partner of Timothy Atkinson and “All in Publishing” their business together, was accused of marketing fraudulent binary options products to their customers on the US. They were working with a few brokers and marketed extravagant lifestyles which they claim to have earned via binary options trading.
In its final judgment against the two affiliates announced today by the SEC, a Florida federal court said that they “aided and abetted the fraud.” The court also named another marketer Michael Wright in the judgment. The fraud is allegedly going on from 2013 to July 2017 in which several affiliate marketers ran fraudulent ad campaigns to promote binary options products, trading systems, and websites. The marketers sent misrepresentations about the platforms they were promoters. They also paid video producers to make fraud testimonials about the systems they were marketing.
Fictional ads get hit hard
According to the SEC, the ads made by the defendants were “pure fiction,” as the people featured in the video said that they had been living an extravagant lifestyle simply by trading binary options. They also tried to show them their trading balances live.
The penalties have been the highest ever in such a case, and all three defendants have agreed to settle with the SEC. They will pay $61.5 to the regulator in lieu of disgorgements, ill-gotten gains, and penalties. More specifically, All in Publishing and Atkinson will pay $27,208,987 in disgorgement of their ill-gotten gains and pre-judgment interest of $2,824,935. Apart from that, they will pay a civil penalty of $27,208,987.
Passerino will pay a disgorgement of $1,894,991, civil penalty of $1,894,991 and a pre-judgment interest of $220,431. Wright will pay $266,353 to resolve cases pending against him. Meanwhile, the CFTC has also filed complaints against the affiliate marketers for using misleading pitches, false claims, and promoting get-rich-quick schemes. The regulator suggests that this fraudulent content was viewed millions of times and at least 50,000 people opened their accounts with different unregulated brokers directly because of the ads.
