On March 19, the U.S. Commodity Futures Trading Commission (CFTC) posted a Notice of Covered Action (NCA) for an over $50 million enforcement action taken against Blue Moon Investments Inc., a binary options firm registered in Seychelles, and 3 owners believed to be residents of Israel for offering illegal, off-exchange binary options and related fraud.
The NCA signals that the CFTC is now accepting whistleblower award claims for the case. Through the CFTC Whistleblower Program, qualified whistleblowers are entitled to monetary awards of 10-30% of the sanctions collected by the CFTC in the enforcement action connected to their whistleblowing.
In September 2020, the CFTC filed an action against David Cartu, Jonathan Cartu, and Joshua Cartu, along with their off-shore companies—All Out Marketing Limited, Blue Moon Investments, Ltd., and Orlando Union Inc.—charging them with illegally selling off-exchange binary options under the brands BeeOptions, Glenridge Capital, and Rumelia Capital to U.S. customers. Additionally, Leeav Peretz and Nati Peretz were charged with operating call centers in Israel aimed at U.S. residents, promising returns of 60% to 85%. Furthermore, Austin resident Ryan Masten and his Texas company BareIt Media LLC (operating as SignalPush) were also implicated in charges of fraud. On March 14, the U.S. District Court for the Western District of Texas entered an order of final judgment against alleged Israeli residents Jonathan Cartu, Leeav Peretz, Nati Peretz and Blue Moon Investments Inc.
According to the CFTC, the order found them “liable for offering illegal, off-exchange binary options and committing fraud in connection with the illegal offering,” thereby resolving the September 2020 case.
Under the order, the defendants are prohibited from engaging in conduct that violates the Commodity Exchange Act (CEA) and are to pay $51,155,645 in restitution and a $153,466,935 penalty.
The CFTC’s NCA gives individuals 90 days to file a WB-APP to apply for a whistleblower award for the case. CFTC whistleblowers who voluntarily provide the agency with original information that contributes to the success of an enforcement action are entitled to a whistleblower award.
Since the CFTC Whistleblower Program was established in 2010, whistleblower tips have allowed the CFTC to recover over $3 billion from fraudsters. The program has in turn paid out over $365 million in whistleblower awards.
In the 2023 Fiscal Year, the program received a record 1,530 whistleblower tips. The CFTC Whistleblower Program is currently in danger of being a victim of its own success, as a funding crisis threatens to undermine the program. A bipartisan bill introduced in July provides a long-term fix to the funding issue undermining the CFTC Whistleblower Program. The CFTC Whistleblower Fund Improvement Act is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) is calling for the immediate passage of the CFTC Whistleblower Fund Improvement Act. NWC has set up an Action Alert calling on whistleblower supports to join them in urging Congress to pass the bill.
Join NWC in Taking Action:
Save the CFTC Whistleblower Program
Further Reading:
CFTC Set New Record for Whistleblower Tips in FY 2023
Leading Whistleblower Attorney: Congress Must Pass CFTC Whistleblower Funding Law