The Commodity Futures Trading Commission has won a civil court case against Jared J. Davis, found guilty of defrauding customers through a global binary options business he created and operated.
Jared J. Davis was ordered to pay $561,971 in restitution to victims of the fraudulent scheme. He also permanently prohibited Davis from engaging in further violations of the Commodity Exchange Act and CFTC regulations, as charged, and imposed permanent registration and trading bans.
$10 million fraud via Option Mint, Option King, and Option Queen
The court found that, from approximately July 2012 through June 2016, Jared Davis fraudulently solicited and accepted approximately $10 million from customers in the U. S. and elsewhere to trade off-exchange binary options on commodities, forex, individual stocks, and stock indices.
The fraudster executed his scheme through internet marketing campaigns, various websites, and call centers using tradenames such as Option Mint, Option King, and Option Queen.
The court found that he defrauded customers by making misrepresentations and omissions of material facts, including failing to disclose that he effectively took the opposing position on each trade and failing to disclose that he frequently had the trading platforms manipulate the options trading software settings to increase the odds of customer losses.
Although he was ordered to pay about half a million US dollars, the CFTC cautioned victims that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets.
In a separate action, Jared Davis was also charged with three counts of tax evasion, and his company, Erie Marketing, LLC, with 11 counts of wire fraud. Davis pleaded guilty to 11 counts of wire fraud on behalf of Erie Marketing, LLC, and to three counts of tax evasion individually.
Earlier this year, he was sentenced to 30 months of incarceration followed by three years of supervised release. He was also ordered to pay a $300,000 fine, $1,039,208 in restitution to the Internal Revenue Service (IRS), and to be jointly and severally liable for the debts of Erie Marketing, LLC, including $656,493.20 in restitution to victims and a $4.4 million fine. Jared Davis was arrested in 2018.
