The case brought by the Commodity Futures Trading Commission (CFTC) against fraudulent binary options scheme Berkley Capital Management (BCM) came to a close on September 14, 2022, as the regulator has secured an order against the last of the defendants in the case – Arie Bos.

Arie Bos, who resides in Rotterdam in the Netherlands, is a co-founder and Managing Partner of BCM and is a limited partner of BBOT and Berkley II. Bos was responsible for all “marketing” on behalf of BCM, and for “administration and reporting” to the fund limited partners and for “membership management” of BBOT and Berkley II and for the limited partnership’s offerings. Bos has never been registered with the Commission in any capacity.

From February 2016 through the present, 58 participants, including one U.S. customer, paid $3,345,124 to fund investments to trade binary options through pools in the names of BBOT or Berkley II.

According to the consent order, Bos is permanently restrained, enjoined and prohibited from directly or indirectly:

• Trading on or subject to the rules of any registered entity (as that term is defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40));
• Entering into any transactions involving “commodity interests” (as that term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2021), for his own personal account or for any account in which he has a direct or indirect interest;
• Having any commodity interests traded on his behalf;

Bos must pay, jointly and severally with Defendants Caniff, BCM, BBOT1 and Berkley II, restitution in the amount of $2,598,632. Bos will also have to pay a civil monetary penalty in the amount of $500,000.

Let’s recall that, on August 29, 2022, the Honorable Robert M. Dow, Jr granted the motion by the CFTC for final default judgment against defendants William Thomas Caniff, Berkley Capital Management, LLC BBOT1, and Berkley II, LP126.

The CFTC complaint charged the Defendants with fraud in connection with a scheme whereby they are alleged to have fraudulently solicited and accepted at least $4.8 million from at least 62 commodity pool participants for the purpose of trading binary options in pool accounts to be managed by BCM.

Caniff is alleged to have lied on his account application at the binary options trading firm, the North American Derivatives Exchange, Inc. (“NADEX”), to conceal an extensive criminal background. Caniff used only a small portion of participants’ funds to trade binary options through this NADEX account and sent Bos fabricated statements reflecting exaggerated reports of profits made while trading.

The CFTC also alleges that Bos ignored numerous red flags and recklessly accepted Caniff’s reports of profitable trading without reasonably verifying the results and then used those results to both solicit participants with claims of past profitable trading and to generate false statements that he sent to them showing grossly-inflated profits.

Caniff is alleged to have misappropriated a substantial portion of the participants’ funds, paying Bos and himself between $1.1 million to $1.2 million each as “fees” based on false profits. The Complaint also alleges that Caniff misappropriated funds to pay some participants a total of $2.3 million in a manner akin to a Ponzi scheme, leaving an investor shortfall of approximately $2.5 million.