Wednesday, April 1, 2020

Binary Affiliate Fraudsters Charged by Feds

Must read

Does Coronavirus Excuse Non-Performance Under a Contract?

The Coronavirus outbreak has raised a number of issues relating to contractual performance obligations. An excuse for non-performance of contractual obligations may...

Ways to Avoid Spam Traps in Email Marketing

New research by Trustwave reveals that 26 per cent of spam is infected with malware. As a result spam filters are getting...

How to do Email Marketing During Coronovirus

During a crisis, your email communication can make or break your business. Even more importantly, it can help, hurt, or confuse people.  You...

Feds Go After Coronavirus Scammers including Jim Bakker

The Federal Trade Commission and Federal Drug Administration took action by sending warning letters to several companies for allegedly selling products using...
Pesach Lattin
Pesach Lattinhttp://pacevegas.com
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

The U.S. Commodity Futures Trading Commission (CFTC) filed fraud charges against two affiliate marketers for binary options trading.

In its complaint, the CFTC alleged that David Sechovich and Peter Szatmari, the two affiliate marketers, created and distributed millions of fraudulent solicitations to open and fund retail binary options trading accounts on websites operated by unregistered, off-exchange brokers.

Sechovich and Szatmari’ marketing materials with numerous false or misleading statements, including:

  • Misrepresenting that trading binary options would generate significant, even guaranteed, profits while minimizing or disclaiming any risks;
  • Claiming that the automated trading software had been tested and generated profits when, in reality, the software had not been tested, did not work as claimed, and in some cases did not exist;
  • Portraying actors or fake personalities as actual owners or users of the automated trading software, without disclosing that they were not real users of the software; and
  • Depicting fictitious trading results as real.

Additionally, the commodity futures trading regulator alleged that both affiliate marketers failed to disclose that they received a fee from the binary options brokers that they recommended every time a new account was opened and funded as a result of their solicitations.

Furthermore, Sechovich and Szatmari did not reveal that the fee was their only reason for recommending the binary options brokers. The allegedly generated at least $3.8 million in profits.

The CFTC sought $2.8 million in penalties and restitution form Sechovich to settle the fraud charges against him. The Commission also ordered him to stop engaging in any activity that violates the Commodity Exchange Act and CFTC regulations.

In addition, the commodity futures regulator ordered Sechovich to return more than $1.8 million to customers who were victims of their fraudulent marketing and to pay $949 in civil monetary penalty.

The CFTC’s litigation against Szatmari is still ongoing. It is seeking full restitution to defrauded individuals, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.

- Advertisement -

More articles

What's your opinion?

- Advertisement -

Latest article

Does Coronavirus Excuse Non-Performance Under a Contract?

The Coronavirus outbreak has raised a number of issues relating to contractual performance obligations. An excuse for non-performance of contractual obligations may...

Ways to Avoid Spam Traps in Email Marketing

New research by Trustwave reveals that 26 per cent of spam is infected with malware. As a result spam filters are getting...

How to do Email Marketing During Coronovirus

During a crisis, your email communication can make or break your business. Even more importantly, it can help, hurt, or confuse people.  You...

Feds Go After Coronavirus Scammers including Jim Bakker

The Federal Trade Commission and Federal Drug Administration took action by sending warning letters to several companies for allegedly selling products using...

Affiliate Vs Partner – What’s in a Name?

There has been a lot of discussion in social forums, blog posts and conference sessions about the use of the term affiliate and/or partner marketing. 'Affiliate vs Partner' was even the Keynote panel session at Affiliate Summit West this year - and even that was inconclusive.