After a three-year court battle, a Cyprus-based financial trading company has agreed to pay nearly $11 million to settle charges that it illegally sold binary options to U.S. investors.

The U.S. Securities and Exchange Commission sued Banc de Binary in 2013, alleging it traded in binary options without first registering the securities as required under federal law. According to a representative of the company, it had about 250,000 investors in the fall of 2012, 50% to 60% of whom were located in the United States.

As part of a settlement of the SEC’s suit and a parallel action by the Commodity Futures Trading Commission, Banc de Binary, its founder Oren Laurent, and three affiliates agreed to jointly pay $7.1 million in disgorgement and $3.95 million in penalties.

A federal judge has approved the settlement and authorized the distribution of the money to harmed investors through a Fair Fund. The defendants also agreed to be suspended from the securities industry for a year.

“Banc de Binary and its affiliates completely disregarded U.S. laws and registration requirements, and as a result they must surrender millions of dollars and be suspended from the industry,” Michele Layne, director of the SEC’s Los Angeles regional office, said in a news release.

Binary options differ from more conventional options contracts because the payout typically depends entirely on whether the price of a particular asset underlying the option will rise above or fall below a specified amount. Critics say binary options trading platforms are little more than online casinos.

“Many of the growing sector’s operators are registered in countries such as the Seychelles and Belize, where there is little transparency around their businesses or ownership,” the Wall Street Journal noted.

Banc de Binary is estimated by industry experts to be one of the world’s largest binary options operators, claiming it has 250,000 account holders in over 80 countries. It started operating in the U.S. in 2010, soliciting U.S customers by advertising through YouTube videos, spam e-mails, and other online advertising and holding itself out as having an office on Wall Street.

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