CFTC claims Head of binary options scam OptionMint violates Court orders
The United States Commodity Futures Trading Commission (CFTC) accuses Jared Davis, the operator of fraudulent binary options schemes OptionKing, OptionMint and OptionQueen, of violating Court orders. This becomes clear from the latest status report filed by the regulator with the Ohio Northern District Court.
The document says that the CFTC has completed its production of over 103,000 electronic documents to the defendant. The regulator made an initial document production of 80,780 electronic documents on January 9, 2020, followed by two supplemental productions of 10,027 electronic documents on March 13, 2020, and 12,358 electronic documents on July 30, 2020.
The CFTC notes that Davis has failed to produce any documents to date in violation of the Court’s Initial Disclosures requirement. The Court has required “the parties to turn their cards over at the beginning of the case – that means both sides must produce actual documents”. The defendant has also failed to indicate whether he has any “documents” or “electronically stored information” in his “possession, custody, or control . . . to support [his] claims or defenses.”
Instead, Davis “has invoked his Fifth Amendment right not to be compelled to testify against himself.” According to the CFTC, such blanket Fifth Amendment refusals to answer questions or discovery requests are disfavored by courts.
The government seeks to stay the civil proceedings because of the pendency of a parallel criminal case.
Both the criminal indictment and the CFTC’s civil complaint describe in some detail an elaborate enterprise designed to defraud investors through sleight of hand and promises of “guaranteed” profits. Both the CFTC’s civil case and the Justice Department’s criminal case focus on alleged misrepresentations and other fraudulent conduct from as early as 2012 through June 2016, and seek to redress investors of more than $10 million.
Ultimately, both cases share a core of operative facts and will involve a determination of whether or not Davis operated, and controlled, a number of domestic and foreign business entities to facilitate a fraudulent binary options scheme.
Notably, the United States seeks only a stay of the proceedings, and its intervention is not set to alter the parties’ respective positions. The criminal proceedings, in fact, may benefit the civil parties, by bringing out facts relevant to the CFTC case and streamlining the ensuing litigation.
The CFTC does not oppose the Government’s motion, whereas Davis opposes it.