The Commodity Futures Trading Commission (CFTC) has busted another fraudulent trading scheme that was soliciting victims with binary options. The regulator issued an enforcement order against Golden Signals LLC and its owner Richard D. Neal for fraud but has already settled for $2.6 million.
Golden Signals acted as a commodity trading advisor (CTA) and commodity pool operator (CPO), but the company did not register as either of them. In addition, it advertised its services across social media channels without making proper disclosure.
A Long-Running Scheme
The scheme operated between October 2016 and November 2021, when Neal and his company engaged in binary options solicitation and trading fraud.
According to the regulator, Neal and his company made several false statements in promoting their services. This includes false claims returns from Neal’s trading activities, whereas he had an overall losing trading record and was not a successful trader.
He even claimed that he earns between $500 to $1,000 on average from his investment products and strategies. He created fake client testimonials and depicted training videos with demo accounts, but did not add the mandatory disclosure.
The regulator said that ten pool participants in the scheme lost around $410,000 in a managed account trading pool. Further, an additional 1,600 customers were cheated out of at least $896,673 through fraudulent solicitations for binary options signals, training and strategy course offerings.
The CFTC is now seeking $409,965 from Neal and Golden Signals in restitution, with an additional $896,673 in disgorgement and a $1,306,638 civil monetary penalty. Furthermore, it issued a cease and desist order for any future violations and a permanent ban on both from trading on any CFTC-regulated entities.
