The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action (Complaint) against the principals of Berkley Capital Management, a binary options trading firm with offices in the US and the Netherlands and two pools that operated as Delaware limited partnerships – BBOT 1 and Berkley II.

The Complaint charges that the defendants – William Thomas Caniff of Steubenville, Ohio and Arie Bos, of Rotterdam – fraudulently solicited more than USD4.8 million from 62 pool participants to trade binary options at the North American Derivatives Exchange (NADEX), a designated contract market located in Chicago, Illinois. As alleged, a mere fraction of participant funds were traded at NADEX, with at least USD2.3 million being misappropriated, leaving a shortfall in excess of USD2.5 million owing to participants. The Complaint also charges Caniff with filing a false statement with NADEX and Bos with issuing false statements to a participant.

James McDonald, the CFTC’s Director of Enforcement, says: “As this case shows, the CFTC continues its commitment to rooting out fraud in our markets. As alleged here, the defendants perpetrated their fraud by lying to the exchange, lying to customers, and pocketing millions of dollars in customer funds, instead of trading them for customers as promised.”