The CFTC, or Commodities Futures Trading Commission has charged the owner of Earn2Trade, Ryan Masten with fraud.
In the verified complaint, filed in the Western District of Texas on September 2, is alleging that Masten was partnered with various Israeli citizens and orchestrated a global investment fraud of approximately $233 million dollars.
The complaint alleges that the total damages for investors within the United States is approximately $165 million dollars.
How did the scam work?
According to the CFTC, Ryan Masten was the lead developer for a binary options trading platform that was systematically “rigged” where investors were nearly guaranteed to lose their entire investments.
In particular, the CFTC is alleging that investors essentially believed that they were trading in live, regulated exchanges, with actual counterparties to their trades. Except, there were no legitimate actual counterparties.
The actual counterparties to the trades were actually the owners of the trading platform, who intentionally rigged the game.
The CFTC is alleging that the bid/ask spreads were illegally widened to the investors’ detriment, that profitable trades (which would have cost the company money) were illegally deleted, and that investors were driven into guaranteed losing trades through an elaborate “auto-trading” scheme.
According to the CFTC, Ryan Masten owned approximately 30% of the company, and he received $1,448,209 — at a minimum — in compensation.
The auto trader scheme
The “auto trading” scheme was elaborate, deceitful, and designed to inflict as much financial damage as possible upon its victims.
As the CFTC complaint stated, “Since at least 2012, Ryan Masten, along with his wife, created a website titled: SignalPush.com.
The purpose of SignalPush.com was to convince investors within the United States and elsewhere that they were receiving “top notch trading signals” from “vetted and experienced money managers or financial professionals.”
The CFTC states that there were no “vetted and experienced money managers or financial professionals” involved in any of the “trading signals” offered by Ryan Masten through the SignalPush.com platform.
Instead, the trading signals were specifically devised to quickly and remorselessly churn the trading account with losing trades — thereby draining the account to zero.
Once the account was drained to zero, a “boiler room” operation located in Tel Aviv, Israel would then begin calling and offering “free trades” and “sign up bonuses” to further lure yet more deposits.
The boiler room is described as a sort of “financial slaughterhouse” where telephone sales people would ruthlessly press financially desperate consumers into “taking one more chance” at financial freedom.
The goal was to drain the credit card to zero available credit. The callousness was stunning.
How the money was spent
As you can imagine, the money was wasted as fast as they allegedly stole it.
Although there is a virtual cornucopia on how defendants wantonly wasted the money, it can best be depicted by the social media postings of Joshua Cartu — an alleged partner of Ryan Masten. Below are a few examples of the “unlimited shrimp cocktail.”
Prison for binary options scammers
TradingSchools.Org has written numerous articles about various characters in the binary options industry. In fact, we have filed numerous whistleblower actions against no less than 24 companies located within the United States.
One of our most recent CFTC complaints was filed (November 2019) against F1 Trade, the alleged broker affiliated with known serial fraudster Guy Gentile of Sure Trader. You can read about that here.
Although it took a few months, F1 Trade was added to the CFTC “Red List” warning US consumers on July 16, 2020.
Additionally, TradingSchools.Org was involved with litigation against another well know fraudster named Lee Elbaz. Many people may remember that she sued me for defamation and failed.
A short time after her failure, she was arrested for securities fraud for remarkably similar to allegations contained within this very article.
Lee Elbaz was sentenced to 22 years in Federal Prison on December 19, 2019.
All of this leads to the question — are the perpetrates of this most recent binary options fraud looking at criminal prosecution? More specifically, is Ryan Masten looking at being charged by the US Attorney?
Truthfully, I don’t know. However, I would find it incredible that there is not already a “sealed indictment” already filed. What is a sealed indictment? Essentially, the US Attorney has a limited time frame in which to prosecute a felony. For this sort of fraud, which would be defined under the Dodd Frank Reform Act, the statute of limitations would be 5-years. Sometimes the US Attorney needs to keep the indictment sealed so that they can locate the physical location of the defendents.
If a defendant suspects they have a pending criminal charge, because they are the subject of a CFTC fraud investigation, then they are likely to hide in a country with no extradition treaty with the United States.
In fact, Ryan Masten’s co-defendants are currently in hiding, according to various media sources. The authorities believe that most are hiding in Israel or eastern Europe using alias names.
However, Ryan Masten is a United States citizen. TradingSchools.Org reached out to Ryan Masten with questions regarding the case. He mentioned that he has only been contacted by the CFTC, but has had no contact with the FBI.
Additionally, Mr. Masten categorically denies all of the allegations contained within the complaint. Additionally, he mentioned that the CFTC is attempting to portray him, and his involvement in the worst possible light.
He describes his involvement as minimal. Yet, it was apparent that he is definitely stressed and losing sleep over this.
Although I would like to believe Mr. Masten that “he had minimal involvement,” with his alleged conspirators — it is important to note that Mr. Masten allegedly used the fake name of “Jax Navarro” in an attempt to cover his true identity, according to the CFTC.
What will happen to Earn2Trade?
As many people are aware, Earn2Trade is a business started by Ryan Masten sometime in 2017, which is after his involvement with the binary options industry.
Earn2Trade has a very good reputation within the “funded trader” community. If you are not aware, the “funded trader” business model allows consumers to trade on a simulator and pay a monthly fee of several hundred dollars in hopes of one day “earning a funded trading account.”
Personally, I consider these “funded trader” programs as gimmicky and mainly tailored towards “day dreamers” looking to get rich through day trading.
Unfortunately, most end up in debt with thousands of dollars in credit card bills because day trading is pretty much a game for suckers. Read my article that talks about the abysmal failure rate of day traders.
Regardless of my opinion of day traders and the “funded trader” industry…it is important to note that Ryan Masten has a very good reputation this industry. TradingSchools.Org has received no complaints regarding Earn2Trade.
However, a more important and pressing question pertaining to Earn2Trade needs to be answered. Presumably, there are hundreds of consumers currently participating in these simulated trading “gauntlets” with Earn2Trade, and I would also presume that their are additional parties trading with live accounts under the Earn2Trade banner. What is going to happen to these people if the US Attorney were to indict Mr. Masten and he were arrested?
Additionally, what if the CFTC were to seek a temporary injunction against Mr. Masten, which barred him from any involvement with the Futures trading industry? This could potentially “pull the plug” on anyone currently trading through Earn2Trade.
My hope is that Ryan Masten addresses these issues to the public at large. And also create a contingency plan where if he were to have to suddenly leave the organization, that effective and honest leadership could assume control.
Wrapping things up
It is important to note that although the CFTC complaint is extremely damaging, and it appears that a criminal investigation would be warranted — that all of these are currently just allegations.
Additionally, Mr. Masten has categorically denied the CFTC’s description and alleged level of involvement. In the United States, there is still the presumption of innocence. And sometimes complaints are drafted in such a salacious form and fashion that they bear little resemblance to the truth.
Thanks for reading. And I would love to read your opinion and comments below.