The US Commodity Futures Trading Commission (CFTC) was recently granted a motion by the court against a binary options scammer who has swindled $3.8 million of victim funds.
What is the motion?
The CFTC sought a motion against Peter Szatmari, who worked as a binary options marketer and defrauded investors of $3.8 million. The Hawaii District Court has granted the clerk’s entry of default motion by the regulator as the defendant has consistently failed to respond to the complaint lodged against him. The regulator wanted him to be declared a default because he has neither appeared in front of the court, nor pleaded or defended himself in any capacity within the stipulated time.
Now, the regulator will file a motion for default judgment against Szatmari. Court filings suggest that this will happen by May 22.
A binary options fraud
The CFTC alleges that Szatmari distributed fraudulent marketing materials in more than six marketing campaigns where he lured potential investors into his binary options scheme. His campaigns encouraged investors to open binary options account with a recommended broker and fund them. This would have provided the investors with free access to automated trading software which could have provided them with enormous returns. The campaigns suggested too-good-to-be-true profits without the risk of a loss. The marketing materials he used has several false and misleading statements.
Szatmari not just used false statements, but also failed to disclose to the investors that he received a fee from them every time he made a recommendation and they opened and funded a new account. He also failed to disclose that.
Szatmari not just used false statements, but also failed to disclose to the investors that he received a fee from them every time he made a recommendation and they opened and funded a new account. He also failed to disclose that the only basis of recommendation was the fee that he was paid by the brokers. His fraudulent statements reached millions of customers, of which 25,000 opened binary trading accounts on his recommendation. The initial funding for these accounts was usually $250 or more.
The regular now demands full restitution to all defrauded individuals, alongside a civil monetary penalty and disgorgement of ill-gotten gains. It also wants a permanent injunction for further violations of the CFTC regulations and the Commodity Exchange Act.