Massive $11 million settlement between US authorities and Banc de Binary

According to reports in the Wall Street Journal and other media, the years- long battle between binary options broker Banc de Binary and the US financial authorities, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, is finally reaching an end, through a settlement between the parties for the massive amount of $11 million.

The case started when in 2013, the two US watchdogs had sued Banc de Binary for illegally signing up U.S. investors to its binary options trading platform. More specifically, the American authorities have been accusing Banc de Binary of soliciting and taking orders from U.S. customers on contracts linked to commodity, currency and stock prices between 2011 and 2013. This was done despite a U.S. ban on off-exchange binary option contracts.

Under the terms of the settlement agreement reached Banc de Binary is expected to pay $7.1 million in disgorgement and restitution, $2 million in civil penalties to the CFTC and $1.95 million in SEC civil penalties. From this amount of money, a $9.05 million fund will be set up in order to repay the U.S. customers of the trading platform that were harmed through the transactions they carried out. According to data from the CFTC, Banc de Binary was found to have taken net deposits of $11 million from 6,614 U.S. customers.

In the Nevada court filings, where the case appeared, Banc de Binary is recorded to have declared that it neither admits or denies the CFTC and SEC allegations, while according to the Wall Street Journal article on the matter a company spokesperson said that: “We look forward to putting this behind us. We thank the U.S. agencies for their professionalism during the course of this matter.”

Official statements by the US authorities on the matter have not been released yet although this is expected to happen soon. Banc de Binary is one of the oldest and most popular binary options brokers and being regulated by CySEC it is allowed to passport its services and offering to the entire EU area.

Having entered recently into a high profile sponsorship deal with English football club Liverpool FC, it does take care of its image as a company, as we have already discussed here in a dedicated article. Despite its efforts however, to have its brand name remain untarnished, it has often featured in investor warnings issued by several regulators across the globe, while CySEC has issued several fines against it for breaching various regulatory provisions, with the most recent case against Banc de Binary ending with another settlement deal, according to which the broker paid to CySEC 350,000 euros.