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Banc De Binary

Company type	Private
Industry	Financial Services
Founded	2009
Headquarters	Tel Aviv, Israel and Limassol, Cyprus
Key people	Oren Shabat Cohen, also known as Oren Laurent, CEO; Sarah Fenwick, Head of Communications
Products	Binary Option Trading
Number of employees	350
Website	www.bancdebinary.com/

Banc De Binary, also known as ET Binary Options Ltd., is an Israeli-Cypriot based private option broker specializing in the trade of binary options (also known as fixed return options) on assets including commodities, stocks, indices, and foreign exchange. The company operates an online trading website through which customers can buy or sell binary ("call" or "put") options, predicting whether the price of a certain commodity will increase or decrease in a given time period. It serves retail and institutional customers worldwide, where not prohibited by local regulation, which following a recent ruling by CySEC is only inside the EU. It is regulated by the Cyprus Securities Exchange CommissionIn June 2013 it was charged with several offenses by the CFTC and SEC; in the same press release the CFTC warned more generally of "fraudulent schemes involving binary options and their trading platforms". An investigation by the British Daily Mail newspaper journalist Tony Hetherington alleged that one client alone had $25,000 stolen from his bank account after signing up with them. On 30th July 2013 the SEC obtained a preliminary injunction from U.S. District Court for the District of Nevada to prevent and freeze any further trading with US customers.

The Wall Street Journal described it as "a website that allows people to bet on the price of gold, oil or stocks".

History

In an interview, the company's founder stated that by June 2011 the company had around 20,000 client accounts, and in an open letter published by August 2012, he stated that number was then 200,000.

Regulation

On 7 January 2013, Banc De Binary was licensed as an investment firm by the Cyprus Securities and Exchange Commission (CySEC), becoming the first binary options broker accepting European Union regulation.

The Financial Services Register maintained by the UK's Financial Conduct Authority states that from 25 February 2013 the company "is authorised or registered by ... ... and may be subject to limited regulation by the Financial Conduct Authority". The company has similar licences in Germany, Italy, France, and Spain. In accordance with the European Markets in Financial Instruments Directive (MiFID), the company has "passported" into almost all member states of the EEA; MiFID allows companies to provide financial services primarily regulated by their home state rather than the state where the customer resides, but clients based in other countries would receive nothing if the company collapsed. Binary trading in the US is legal, but only if done through properly registered and regulated firms , and on exchanges such as NADEX. These firms follow basic rules such as keeping client money in separate accounts, doing credit checks to ensure customers have the money to gamble and having allowing trades to be done in an unbiased way so that the price of the asset is made clear and can not be manipulated by the firm. In the US the CTFC is responsible for ensuring that once customer's binary trade is made, the asset price can not be manipulated for profit by a firm, by not registering with the CTFC Banc de Binary did not have this oversight.

Products and services

The company offers several products and services. Traders can trade on over 200 global assets including commodities, stocks, indices, and FOREX using several variations of the trading platform including classic binary options, long term options, sixty seconds, one touch (boundary options), and pairs trading.

Awards

• 2013, Best Binary Options Broker in the Middle East 2013, JFEX
• 2012, Best Binary Options Customer Service, ForexTraders
• 2011, World Finance 100, World Finance Magazine
• 2011, Best Customer Service, FX Empire
• 2011, Broker of the Year, Binary Options Daily
• 2011, Platform of the Year, Binary Options Daily

US regulatory issues

Banc de Binary claimed to have an office in New York City at Trump Towers, but this was in fact a virtual office space with no significant physical presence. Trading and offering financial services to US consumers without gaining a license first from US regulators is illegal, as it would mean the client would have no protection. The company also claims on it's site at it's UK Companies House report to have an office at 1 King Street, EC2, in the heart of the City of London, but this like it's NY address is also a virtual office with no physical presence.

On 6 June 2013, Banc De Binary was charged by both the CTFC and SEC for alleged violations of US financial regulations. Both the CTFC and SEC working in conjunction with one another filed civil suits against the company, seeking disgorgement, financial penalties and other preliminary and permanent injunctions against the company. In civil suits filed in Nevada, the SEC and CTFC allege that the company was offering off-exchange traded options to US customers and unlawfully solicited US customers to buy and sell options. The CTFC and SEC's suit also alleges that it did not limit its offerings to eligible contract participants, contrary to US regulations; a fully regulated broker would complete credit checks on customers to ensure that those with low finances did not trade with them. Amongst the allegations made by the SEC is that Banc de Binary induced people with limited funds, including one unemployed person with less than $1000, to open accounts. In response to the US charges the company put out a statement that made no mention of its legal problems, but instead incorrectly implied that they were in negotiations and that they had voluntarily left the US market, when in fact the SEC had taken an injunction out to stop them:

In a message posted on its Web site, the company stated that

Banc De Binary is voluntarily discontinuing its operations in the United States. The United States Commodity Futures Trading Commission and Securities and Exchange Commission have asserted that Banc De Binary is not permitted to offer its binary option products to U.S. residents without registering with those agencies. We are currently in discussions with the CFTC and SEC about these issues, but in the interim, we have discontinued all business with U.S. residents.

Investor advisories

Banc De Binary has a file with the United States' Better Business Bureau that was opened in 2010. It is no longer accredited, because "The BBB reports that Banc De Binary has informed them that they no longer operate any offices in the United States." Previously, it had been rated "F" due to the amount of time it had been in operation and for failing to respond to 5 of 11 customer complaints.

It appears on the US Securities and Exchange Commission's "List of Unregistered Soliciting Entities That Have Been the Subject of Investor Complaints".

In Canada, it is listed on the Ontario Securities Commission's Investors Warning List of "companies that appear to be engaging in activities that may pose a risk to investors".

After receiving "at least one complaint from a Québec investor who traded through Banc de Binary's platform and was unable to recover his investment", the Autorité des marchés financiers (AMF) warned investors about the company. It noted that a bonus of 50% of the opening deposit is available, but customers who accept the bonus are not allowed to make withdrawals until they have made trades equal to 20 times their initial deposit. The AMF also pointed out that, due to the “all or nothing” nature of binary options, an investor who wrongly predicts market movement will lose his entire investment. Banc De Binary is not registered with the AMF and does not specifically target investors in Québec. The AMF also, like the CFTC, included a more general warning about the risk of fraud in binary options trading in the same press release.

External links

• SEC Press Release about charges filed against Banc De Binary
• SEC Litigation Release
• CFTC Charges “Prediction Market” Proprietor Banc De Binary with Violating the CFTC’s Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant
• CFTC investor alert about binary options trading

References

1. ^ "U.S. COMMODITY FUTURES TRADING COMMISSION v. BANC DE BINARY LTD. (A/K/A E.T. BINARY OPTIONS LTD.), COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF AND FOR CIVIL MONETARY PENALTIES UNDER THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS" (PDF). Banc de Binary's chief executive officer, Oren Shabat Cohen (a/k/a Oren Laurent), resides in Israel and is the registrant for the website www.bbinary.com.
2. BANCDEBINARY.COM whois record, retrieved 2013-10-15. "Registrant Name: Oren Shabat Cohen"
3. ^ "CFTC Charges "Prediction Market" Proprietor Banc de Binary with Violating the CFTC's Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant". Retrieved 2013-10-16. {{cite web}}: Cite has empty unknown parameter: |1= (help)
4. Get Out! CySEC Bans FX Firms From Accepting Non-EU Clients. Forex Magnates. Retrieved on 2013-10-16.
5. ^ "Regulated Investment Firms – CySEC". CySEC. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help) Cite error: The named reference "CYSEC" was defined multiple times with different content (see the help page).
6. ^ TONY HETHERINGTON: US watchdog takes 'bank' Banc de Binary to court...but Britain lets it in. This is Money. Retrieved on 2013-10-16.
7. http://www.sec.gov/litigation/litreleases/2013/lr22767.htm
8. "Regulators Sue Prediction Site, Allege Illegal Options". Wall Street Journal. Retrieved 11 June 2013.
9. Wright, Susan (27 May 2013). "Banc De Binary CEO Oren Laurent Opens Up on Binary Options". Investment Underground. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
10. "Banc De Binary's CEO Oren Laurent Expresses Sincere Thanks". BinaryOptionsDaily.com. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
11. "Banc De Binary is first Binary Options Broker in EU". Financial Mirror. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
12. "Financial Services Register 2013". Bank of England Financial Services Register. Jun 2013. Retrieved 8 July 2013.
13. BaFin. "BaFin – Unternehmensdatenbank BaFin" (in Template:De icon). Portal.mvp.bafin.de. Retrieved 2013-08-17.{{cite web}}: CS1 maint: unrecognized language (link)
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18. http://www.nadex.com/why-nadex/legal-for-us-residents.html
19. http://www.nadex.com/why-nadex/legal-for-us-residents.html
20. "Binary Option". investopedia.com. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
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22. "One-Touch Option". investopedia.com. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
23. "JEFX AWARD 2013 Winners". Jordan Forex Expo and Award 13. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
24. "FOREX industry celebrates the JFEX 2013 awards winners". ICN.com. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
25. "Forex Traders". ForexTraders.com. Retrieved Mar 1 2013. {{cite web}}: Check date values in: |accessdate= (help)
26. "Banc De Binary World Finance 100 Profile". World Finance 100. Retrieved Aug 11 2013. {{cite web}}: Check date values in: |accessdate= (help)
27. "FXEmpire". FXEmpire. Retrieved Jan 1 2013. {{cite web}}: Check date values in: |accessdate= (help)
28. ^ "Binary Options Daily". BinaryOptionsDaily.com. Retrieved Jan 1 2013. {{cite web}}: Check date values in: |accessdate= (help)
29. "SECURITIES AND EXCHANGE COMMISSION vs. BANC DE BINARY LTD, complaint" (PDF). Banc de Binary maintained a virtual office on Wall Street
30. http://wck2.companieshouse.gov.uk//compdetails
31. http://bookings.executiveoffices.co.uk/virtual-offices/1-king-street-ec2v-8au
32. "Banc De Binary: Gets Charged by the CTFC". ForexMagnates. Retrieved 19 June 2013.
33. "CTFC files civil suit against Banc De Binary". The Fx View. Retrieved 19 June 2013.
34. ^ "SEC Warns Investors About Binary Options and Charges Cyprus-Based Company with Selling Them Illegally in U.S." Securities Exchange Comission. Retrieved 19 June 2013. Cite error: The named reference "SEC" was defined multiple times with different content (see the help page).
35. "CFTC Charges "Prediction Market" Proprietor Banc De Binary with Violating the CFTC's Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant". Retrieved 19 June 2013.
36. "CFTC Charges "Prediction Market" Proprietor Banc de Binary with Violating the CFTC's Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant". Retrieved 19 June 2013.
37. http://www.sec.gov/litigation/litreleases/2013/lr22718.htm
38. Banc de Binary Ltd. (Release No. LR-22767; August 1, 2013). Sec.gov. Retrieved on 2013-10-16.
39. "Binary Options Trading Online with Banc De Binary". L.bbinary.com. Retrieved 2013-08-17.
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42. "Public Alert: Unregistered Soliciting Entities". Securities and Exchange Commission. Retrieved 15 October 2012.
43. "Investors Warning List". Ontario Securities Commission. Retrieved 13 January 2013.
44. "Binary options – AMF Cautions About Solicitations by Banc de Binary". Lautorite.qc.ca. Retrieved 2013-08-17.

• Companies established in 2009
• Companies of Cyprus
• Financial derivative trading companies