Future seminars related to binary options industry regulation should be targeted not only at attracting of more brokers and traders. Some recent actions of The U.S.
Commodity Futures Trading Commission (CFTC) and courts consent order for fraudulently promoting and selling to the public of commodity trading systems may be a good topic for new training initiatives for the binary options community.
Although the case presented here is not directly affecting operations of any binary options broker, it may be a good lesson to be learned by all interested in binary options commerce and its regulated future.
It could be a starting point for companies and traders to know what to avoid in days yet to come.
At the end of June, CFTC released that the U.S. District Court of California entered an order of default judgment and permanent injunction against three persons from Los Angeles, California.
The two companies, The Trade Tech Institute, Inc. (Trade Tech), Technology Trading International, Inc. (Tech Trading), and Robert Sorchini (Sorchini) fraudulently promoted and marketed to the public a range of systems to be used for trading futures contracts and options on futures contracts in managed accounts. These systems include Trade Tech Analytics, Paradigm, Optimum, Expeditor, MAC, Hybrid, Daytona and Pioneer.
The companies and Sorchini failed to warn clients of the risks related in trading futures and options. In client managed accounts they havent done disclosures to systems losing performance records and made fraudulent performance-based guarantees. In addition, Trade Tech published ambiguous testimonial on its website and failed to inform clients or obtain clients consent when switching clients managed accounts between systems.
Recently, Trade Tech, Tech Trading and Sorchini are prohibited from involvement in any commodity-related activity, including trading and registering or seeking exemption from CFTC registration.
In accordance with the courts default, the two companies have to tip over more than $3.3 million of ill-gotten gains they received. Only the civil monetary penalties which the aforementioned companies should pay exceed $10 million. Sorchini is supposed to disgorge $764 thousand of ill-gotten gains he received from his fraudulent conduct too.
Possibly, a lot of binary options enthusiasts have been happy to see one and the same announcement about the forthcoming seminar devoted to binary options industry regulation, organized by Spotoption. It may be one of most impressive events for a part of the binary community. Though, it is good for the future to think about seminars and workshops with included topics about lessons learned, good practices and frauds in the binary options business.
Referring to the above case, one of good lessons learned by binary options traders may be that not only the broker, but the trading platform offered counts too.
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