Daniel Fingerhut, a resident of Miami, Florida, and Itay Barak, Tal Valariola and Digital Platinum Limited (DPL), residents of Israel have been required to pay a $7 billion in disgorgement and civil monetary penalties, the CFTC has announced.
The penalty includes permanent trading and registration bans on Fingerhut, Barak and Valariola.
A complaint from 5 May 2020 charged the defendants with fraudulently soliciting tens of millions of investors to open off-exchange binary options and digital assets trading accounts. These accounts traded forex pairings, metals, and digital assets. The trades went through websites operated by unregistered binary options and digital asset brokers.
The court found that Fingerhut, Barak and Valariola have fraudulently solicited customers through emails, websites, and video sales letters by promising free access to reportedly successful automated trading systems which traded in binary options involving commodity interests and digital assets. The claims the defendants made misrepresented hypothetical and fictitious trading results as real results, and used forged customer recommendations.
Additionally, Fingerhut made false statements to the CFTC relating to the investigation and his part in the scheme. He is required to pay $800,011 in penalty and Barak, Valariola and DPL have to pay $6 million.
The CFTC noted that it is still processing the case against two additional entity defendants and one relief defendant.
Earlier in October, the CFTC brought charges of with fraudulent solicitations and misappropriation of over $3.9 million against Kikit & Mess Investments, LLC and its owner Abner Alejandro Tinoco.
