Home » Binary Options , broker , EZTD Inc , fine , Forex , Penalty , SEC , Securities and Exchange Commission , Unlicensed » SEC Hits Israeli Binary Options Broker EZTD with $1.7 Million Fine
The agency also stated that EZTD was not registered as a securities dealer in the United States. EZTD was also accused to failing to disclose that investors were taking on big risks by entering into trades where EZTD was the counterparty, which means that all client losses went into the pockets of the brokerage, “not only did the firm fail to register the binary options or register as a broker-dealer to legally sell the investment to U.S. investors in the first place, but it failed to disclose on its trading platforms that there was significantly greater potential for investors to lose rather than earn money,” said the SEC.
Additionally, The SEC stated that EZTD lured investors into taking risks by claiming that their platform was “an extremely lucrative avenue for individuals who are looking to see an increase in income.”
According to SEC’s findings, less than 3 percent of EZTD’s 4000 US-based customers turned a profit. Stephanie Avakian, Deputy Director of the SEC’s Enforcement Division, explained that EZTD did not disclose that the odds were stacked against the client, “EZTD’s revenues were largely derived from customer trading losses, yet EZTD emphasized the profitability of trading in binary options,” she added.
In addition to fining EZTD, the SEC issued an investor alert on the dangers of unregistered Binary Options brokers.
European regulators have also issued multiple warnings over the last few months on unlicensed Forex and Binary Options brokers, with Dutch Minister of Finance, Jeroen Dijsselbloem, looking to ban the advertising of Binary Options in the Netherlands, along with other “toxic” investment products.