September 26, 2021

Volume XI, Number 269

Advertisement

September 24, 2021

Subscribe to Latest Legal News and Analysis

CFTC Gives Fraudulent Trading Platform The Fingerhut

The CFTC recently filed a multi-million dollar fraud action charging three individuals and three companies with fraudulently soliciting tens of millions of customers and prospective customers to open and fund off-exchange binary options and digital asset trading accounts. These accounts traded foreign exchange currency pairs, metals, and digital assets through websites operated by unregistered binary options and digital asset brokers.

The CFTC claims Daniel Fingerhut, Digital Platinum, Inc., Digital Platinum, Ltd., Huf Mediya Ltd., and persons that control the three entities, created fraudulent marketing materials which promised profits with no risk of loss and disseminated them via email spam and by making videos available online. Over 59,000 customers opened and funded trading accounts as a result of these fraudulent marketing campaigns, which generated payments of over $20 million in commissions to the defendants. According to the complaint, the marketing materials touted fake trading performance using advertised binary options and digital asset trading software and systems. The marketing videos typically featured actors—often posing in front of props such as mansions and private jets—who falsely claimed they had become rich trading.

The complaint charges Fingerhut with making materially false or misleading statements to CFTC staff, including while under oath, in an apparent effort to conceal the extent of his role in the fraud and to avoid producing documents. In its continuing litigation against the defendants, the CFTC seeks full restitution to defrauded individuals, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and permanent injunctions against further violations of the Commodity Exchange Act and CFTC regulations, as charged.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 132
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Richard Levin Polsinelli Fintech Attorney
Shareholder

Richard Levin is the Chair of Polsinelli’s Chambers rated FinTech and Regulation Practice.  He brings his experience as a senior legal and compliance officer on Wall Street and in London to bear in advising clients on corporate, securities and regulatory issues. A problem-solver by nature, his practice focuses on helping financial services and technology (FinTech) clients identify and address regulatory issues as they build their businesses.

The FinTech sector is...

303.583.8261
Paul Roshka, Polsinelli, financial securities lawyer
Shareholder

Known for his thorough preparation and persistence, Paul Roshka has a national practice representing companies, their directors, officers, and employees during investigations and enforcement/disciplinary proceedings involving potential violations of the federal and state securities laws, and other financial regulatory statutes and rules. He has handled matters initiated by almost every SEC Regional Office and FINRA District Office, and their Home Offices in Washington, D.C.

He is also a recognized bet-the-company litigator. Paul has defended securities/financial...

602.650.2098
Stephen A. Rutenberg Shareholder Polsinelli New York Bankruptcy and Financial Restructuring Bankruptcy Litigation Capital Markets ,Commercial Lending ,Debt and Claims Trading, Financial Services, Insolvency, Financial Technology FinTech and Regulation
Shareholder

Stephen Rutenberg’s practice focuses on the intersection of special situations investing and FinTech including cryptocurrency and blockchain technology. 

A significant component of Stephen’s practice relates to his work in the distressed debt market, representing clients in the purchase and sale of loans and securities of distressed and bankrupt companies. Recent representations include advising on the purchase, sale and financing of bankruptcy trade claims in several major chapter 11 cases, including Lehman Brothers, and the MF Global and Icelandic bank liquidations. He works with...

212.413.2843
Advertisement
Advertisement
Advertisement