September 17, 2019

CFTC Charges Former Head of International Binary Options Scheme with $10 Million Fraud

Washington, DC –The U.S. Commodity Futures Trading Commission filed a civil enforcement action in the U.S. District Court for the Northern District of Ohio, charging Jared J. Davis of Ohio with fraud relating to a global binary options business he created and operated.

The complaint charges that from at least July 2012 through at least June 2016, Davis fraudulently solicited and accepted at least $10 million from customers in the United States and elsewhere to trade off-exchange binary options on commodities and foreign currencies (forex), among other things.  As alleged in the complaint, Davis executed his unlawful scheme through internet marketing campaigns, various websites, and call centers using trade names such as Option Mint, Option King, and Option Queen.  The complaint further charges that Davis defrauded customers by making misrepresentations and omissions of material facts, including misrepresenting and failing to disclose that he effectively took the opposing position on each trade and therefore made money when customers lost money on trades.  The complaint also alleges that Davis failed to inform customers that he frequently had the trading platforms manipulate the options trading software settings to increase the odds of customer losses.

In its continuing litigation, the CFTC seeks full restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act and Commission Regulations.  The CFTC cautions victims that restitution orders may not result in the recovery of money lost, because the wrongdoers may not have sufficient funds or assets. 

Related Criminal and SEC Actions

In a related pending criminal action, the U.S. Attorney’s Office for the Northern District of Ohio charged Davis in a 22-count indictment for conspiracy to commit wire fraud, conspiracy to launder money, wire fraud, money laundering, obstruction of justice, tax evasion, and other crimes. In addition to the criminal action, the U.S. Securities and Exchange Commission (SEC) charged Davis in a related enforcement action and entered into a partial settlement against him.

The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of Ohio, the Federal Bureau of Investigation’s Cleveland Field Office, the Internal Revenue Service Criminal Investigation’s Cincinnati Field Office, and the SEC.

CFTC Division of Enforcement staff members responsible for this case are Peter M. Haas, Danielle Karst, Jason Gizzarelli, Kyong G. Koh, Michael Amakor, and Paul G. Hayeck.

-CFTC-