Following earlier settlement talks, the U.S. Commodity Futures Trading Commission (CFTC) has announced that Judge Darrin P. Gayles of the U.S. District Court for the Southern District of Florida issued orders granting permanent injunctions against Daniel Fingerhut, a resident of Miami, Florida, and Itay Barak, Tal Valariola and Digital Platinum Limited (DPL), residents of Israel, and requiring them to pay a combined $7 million in disgorgement and civil monetary penalties for violations of the Commodity Exchange Act (CEA) and CFTC regulations.

The orders also impose permanent trading and registration bans on Fingerhut, Barak and Valariola, among other injunctive relief.

The court’s orders stem from a CFTC complaint filed on May 5, 2020, charging Fingerhut, Barak, Valariola, DPL and others with fraudulently soliciting tens of millions of customers and prospective customers to open and fund off-exchange binary options and digital assets trading accounts. These accounts traded foreign exchange currency pairings, metals, and digital assets through websites operated by unregistered binary options and digital asset brokers.

The orders find that Fingerhut, Barak and Valariola created, disseminated and/or facilitated the use of fraudulent solicitations in emails, websites, and video sales letters promising free access to purportedly successful automated trading systems that traded on behalf of clients in binary options involving commodity interests and digital assets. These solicitations misrepresented hypothetical and fictitious trading results as real results, and used fabricated customer testimonials.

The order against Fingerhut also finds that he knowingly made false statements to the CFTC in connection with the investigation into his role in the fraud.

The orders require Fingerhut to pay $400,011 in disgorgement and a $600,000 civil monetary penalty, and Barak, Valariola and DPL to pay $3 million in disgorgement and a $3 million civil monetary penalty.

The CFTC continues to litigate this matter against two additional entity defendants and one relief defendant.

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because wrongdoers may not have sufficient funds or assets. The CFTC said it will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

The CFTC added that it thanks the Israel Securities Authority and the Financial Supervision Commission of Bulgaria in connection with this matter.