UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING

File No. 3-17673

In the Matter of

EZTD Inc.

Respondent.

I.

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PROPOSED PLAN OF

DISTRIBUTION

OVERVIEW

1.

The Division of Enforcement submits this Proposed Plan of Distribution (the

“Plan”) to the United States Securities and Exchange Commission (the “Commission”) pursuant

to Rule 1101 of the Commission’s Rules on Fair Fund and Disgorgement Plans (the

“Commission’s Rules”), 17 C.F.R. § 201.1101. This Plan provides for the distribution of a Fair

Fund (the “Fair Fund”) comprised of disgorgement paid by EZTD Inc. (“EZTD” or the

“Respondent”), in addition to any additional funds collected from the Respondent, pursuant to

the Order 1 in the above-captioned matter.

2.

As described more specifically below, the Plan seeks to compensate investors

who were harmed by the Respondent’s conduct described in the Order, in connection with

EZTD’s offers and sales of binary options to U.S. customers, between June 2011 and August

2014. Based on information obtained by the Commission staff during its investigation and the

review and analysis of applicable records, the Commission staff has reasonably concluded that it

has all records necessary to calculate each investor’s harm. As a result, the Fair Fund is not

being distributed according to a claims-made process, so procedures for making and approving

claims in accordance with Rule 1101(b)(4) of the Commission’s Rules, 17 C.F.R. §

201.1101(b)(4) are not applicable.

3.

As calculated using the methodology detailed in the Plan of Allocation (attached

as Exhibit A), investors will be compensated for their losses on binary options purchased through

EZTD’s two online trading platforms, eztrader.com and globaloption.com (the “Securities”),

from June 1, 2011 through August 31, 2014 (the “Relevant Period”).

Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act

of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing

Remedial Sanctions and a Cease-and-Desist Order, Securities Act Rel. No. 10251 (Nov. 10, 2016).

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4.

In the view of the Commission staff, this methodology constitutes a fair and

reasonable allocation of the Fair Fund.

5.

The Commission has custody of the Fair Fund and shall retain control of the

assets of the Fair Fund. The Plan is subject to approval by the Commission, and the Commission

retains jurisdiction over its implementation.

II.

BACKGROUND

6.

On November 10, 2016, the Commission issued the Order instituting and

simultaneously settling administrative and cease-and-desist proceedings against the Respondent.

In the Order, the Commission found that between June 1, 2011 and August 31, 2014, the

Respondent made offers and sales of binary options to U.S. customers through two online trading

platforms, eztrader.com and globaloption.com. These binary options constituted securities under

the federal securities laws. The Respondent, however, failed to register any of its offers and

sales of binary options with the Commission and it failed to register with the Commission as a

broker-dealer. The Commission ordered the Respondent to pay $1,515,858 in disgorgement,

$57,691 in prejudgment interest, and a $200,000 civil money penalty, for a total of $1,773,549,

to the Commission. The Commission also created the Fair Fund, pursuant to Section 308(a) of

the Sarbanes-Oxley Act of 2002, so the penalty paid, along with the disgorgement and interest

paid, can be distributed to harmed investors.

7.

To date, the Respondent has paid a total of $738,980, and any additional funds

collected from the Respondent, pursuant to the Order will be added to the Fair Fund. The Fair

Fund has been deposited in a Commission-designated account at the United States Department of

the Treasury, and any accrued interest will be added to the Fair Fund.

III.

DEFINITIONS

As used in this Plan, the following definitions will apply:

8.

“Administrative Costs” shall mean any administrative costs and expenses,

including without limitation tax obligations, the fees and expenses of the Tax Administrator and

the Fund Administrator, bond premium expenses, and investment and banking costs.

9.

“Certification Form” means the form that will be emailed or mailed to each

Preliminary Claimant in order to confirm his, her, or its calculated Recognized Loss, the name

and mailing address of the payee to which a Distribution Payment should be issued, if applicable.

The Certification Form may be accompanied by tax forms, as required, relating to the tax

treatment of any distribution.

10.

“Distribution Payment” means a payment from the Fair Fund to a Payee in

accordance with the terms of this Plan.

11.

“Eligible Claimant” means a Preliminary Claimant, who is determined to have

suffered a Recognized Loss, pursuant to the Plan of Allocation, and who is not an Excluded

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Party or an Unresponsive Preliminary Claimant.

12.

“Excluded Party” shall mean: (a) the Respondent, or Respondent’s advisers,

agents, nominees, assigns, creditors, heirs, distributees, spouses, parents, children, or controlled

entities; (b) the Fund Administrator, its employees, and those Persons assisting the Fund

Administrator in its role as the Fund Administrator; and (c) any purchaser or assignee of another

Person’s right to obtain a recovery from the Fair Fund for value; provided, however, that this

provision shall not be construed to exclude those Persons who obtained such a right by gift,

inheritance or devise.

13.

“Fair Fund” means the fund created by the Commission pursuant to Section

308(a) of the Sarbanes-Oxley Act of 2002, for the benefit of investors harmed by Respondent’s

violations described in the Order.

14.

“Final Determination Notice” means the written notice sent by the Fund

Administrator to (a) any Preliminary Claimant who timely submitted a written dispute of his, her,

or its calculated Recognized Loss notifying the Preliminary Claimant of its resolution of the

dispute; and (b) those Preliminary Claimants who have not responded to the Plan Notice by

returning the Certification Form and/or any other requested documentation, as described in

paragraph 42, notifying the Preliminary Claimant that he, she, or it has been deemed an

Unresponsive Preliminary Claimant. The Fund Administrator will not send a Final

Determination Notice to a Preliminary Claimant, if his, her, or its Plan Notice was returned as

“undeliverable.” The Final Determination Notice will constitute the Fund Administrator’s final

ruling regarding the status of the claim.

15.

“Net Available Fair Fund” means the Fair Fund, plus any interest or earnings,

less Administrative Costs.

16.

“Payee” means an Eligible Claimant whose distribution amount is equal to or

greater than $10.00, as calculated in accordance with the Plan of Allocation, who will receive a

Distribution Payment.

17.

“Person” means natural individuals as well as legal entities such as corporations,

partnerships, or limited liability companies.

18.

“Plan Notice” means a written notice from the Fund Administrator to each

Preliminary Claimant regarding the Commission’s approval of the Plan, including, as

appropriate: a statement characterizing the distribution; a link to the approved Plan posted on the

Commission’s website and instructions for requesting a copy of the Plan; a Certification Form,

along with specification of any additional information needed from the Preliminary Claimant to

prevent him, her, or it from being deemed an Unresponsive Preliminary Claimant; his, her, or its

preliminary Recognized Loss; a description of the tax information reporting and other related tax

matters; the procedure for the distribution as set forth in the Plan; and the name and contact

information for the Fund Administrator as a resource for additional information or to contact

with questions regarding the distribution.

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19.

“Plan of Allocation” means the methodology used by the Fund Administrator to

calculate if a Preliminary Claimant has suffered a Recognized Loss. The Plan of Allocation is

attached as Exhibit A.

20.

“Preliminary Claimant” means a Person, or their lawful successors, identified

by the Fund Administrator based on its review and analysis of documents obtained by the

Commission staff during its investigation, including account-level transactional records, who

may have suffered a loss as a result of transactions in the Securities during the Relevant Period.

21.

“Recognized Loss” means the amount of loss calculated in accordance with the

Plan of Allocation.

22.

“Relevant Period” is June 1, 2011 through August 31, 2014.

23.

“Securities” means binary options purchased through EZTD’s two online trading

platforms, eztrader.com and globaloption.com.

24.

“Unresponsive Preliminary Claimant” means a Preliminary Claimant whose

address the Fund Administrator has not been able to verify and/or who does not timely respond

to the Fund Administrator’s attempts to obtain information, including any information sought in

the Plan Notice and Certification Form. Unresponsive Preliminary Claimants will not be eligible

for a distribution under the Plan.

IV.

TAX COMPLIANCE

25.

On December 1, 2017, the Commission appointed Miller Kaplan Arase LLP as

the tax administrator (the “Tax Administrator”) for the Fair Fund to handle the tax obligations of

the Fair Fund. 2 The Tax Administrator will be compensated for reasonable fees and expenses

from the Fair Fund in accordance with its Revised 2017-2018 Engagement Letter Agreement

with the Commission.3

26.

The Fair Fund constitutes a Qualified Settlement Fund (“QSF”) under Section

468B(g) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. § 468B(g), and related

regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5. The Tax Administrator is the

administrator of such QSF for purposes of Treas. Reg. § 1.468B-2(k)(3)(I) and shall satisfy the

tax-related administrative requirements imposed by Treas. Reg. § 1.468B-2, including, but not

limited to:

(a)

Obtaining a taxpayer identification number;

(b)

Requesting funds necessary for the timely payment of all applicable taxes,

the payment of taxes for which the Tax Administrator has received funds,

and the filing of applicable returns; and

See Order Appointing Tax Administrator, Exchange Act Rel. No. 82195 (Dec. 1, 2017).

See Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that Establish

Distribution Funds, Exchange Act Rel. No. 81057 (June 30, 2017).

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(c)

Fulfilling any information reporting or withholding requirements imposed

on distributions from the Fair Fund.

27.

All tax obligations will be paid from the Fair Fund, subject to the review and

approval of Commission staff.

V.

FUND ADMINISTRATOR

28.

On March 23, 2020, the Commission appointed KCC, LLC, as the fund

administrator for the Fair Fund (the “Fund Administrator”), and the Fund Administrator has

obtained a bond in the amount of $738,980.00, as ordered. 4 Pursuant to Rule 1105(a) of the

Commission’s Rules, 17 C.F.R. § 201.1105(a), the Fund Administrator may be removed at any

time by order of the Commission or hearing officer.

29.

The Fund Administrator will be responsible for administering the Fair Fund in

accordance with the Plan. This will include, among other things, taking reasonable steps to

obtain accurate mailing information for Preliminary Claimants; establishing a website and

staffing a call center to address inquiries regarding the Plan; disseminating the Plan Notice;

preparing accountings; cooperating with the Tax Administrator appointed by the Commission to

satisfy any tax liabilities and to ensure compliance with income tax reporting requirements,

including but not limited to Foreign Account Tax Compliance Act (FATCA); disbursing the Fair

Fund in accordance with this Plan, as ordered by the Commission; and researching and

reconciling errors and reissuing payments, when possible.

30.

To carry out the purposes of this Plan, the Fund Administrator is authorized to

make and implement immaterial changes to the Plan upon agreement of the Commission staff. If

a change is deemed to be material by the Commission staff, Commission approval is required

prior to implementation by amending the Plan.

31.

The Fund Administrator may extend any procedural deadline contained in the

Plan for good cause shown, if agreed upon by the Commission staff.

32.

When administering this Plan, the Fund Administrator, and/or each of its

designees, agents and assigns, may rely on: all applicable law; orders issued by the Commission,

including orders issued by delegated authority; orders issued by an administrative law judge, if

any, appointed in this proceeding; and any records, including records containing investor

information, provided by Commission staff.

33.

The Fund Administrator is authorized to enter into agreements with third parties

as may be appropriate or necessary in the administration of the Fair Fund, provided such third

parties are not excluded pursuant to other provisions of this Plan. In connection with such

agreements, the third parties shall be deemed to be agents of the Fund Administrator under this

Plan.

See Order Appointing Fund Administrator and Setting Bond Amount, Exchange Act Rel. No. 88454 (Mar. 23,

2020).

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34.

The Fund Administrator will be entitled to payment from the Fair Fund of

reasonable fees and expenses, including the bond premium, incurred in the performance of its

duties (including any such fees and expenses incurred by agents, consultants or third parties

retained by the Fund Administrator in furtherance of its duties).

VI.

PLAN PROCEDURES

Specification of Preliminary Claimants

35.

Using information obtained during its investigation, the Commission has

identified the Preliminary Claimants. Preliminary Claimants are limited to only those Persons

who may have suffered a loss as a result of transactions in the Securities during the Relevant

Period.

Procedures for Locating and Notifying Preliminary Claimants

36.

Within thirty (30) days of Commission approval of the Plan, the Fund

Administrator will:

(a)

Establish and maintain a website, www.EZTDFairFund.com, devoted

solely to the Fair Fund. The Fair Fund’s website will make available a

copy of the approved Plan, include a copy of the Plan Notice, the

Certification Form, and related materials in downloadable form, and such

other information that the Fund Administrator believes will be beneficial

to Preliminary Claimants;

(b)

Establish and maintain a toll-free telephone number, (855) 660-1130, for

Preliminary Claimants to call and speak to a live representative of the

Fund Administrator during its regular business hours or, outside of such

hours, to hear pre-recorded information about the Fair Fund;

(c)

Establish and maintain a traditional mailing address (EZTD Fair Fund, c/o

KCC Class Action Services, P.O. Box 6159, Novato, CA 94948-6159) and

an email address, info@EZTDFairFund.com, which will be listed on all

correspondence from the Fund Administrator to Preliminary Claimants as

well as on the Fair Fund’s website;

(d)

Establish and maintain a case specific database of all Preliminary

Claimants based upon information provided to and obtained by the Fund

Administrator, including their last known physical and email addresses;

(e)

Run a National Change of Address search to retrieve updated addresses

for all records in the database, thereby ensuring the mailing information

for Preliminary Claimants is up-to-date; and

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(f)

Send a Plan Notice to each Preliminary Claimant’s last known email

address (if known) and/or mailing address.

37.

The Commission staff retains the right to review and approve any material posted

on the Fair Fund’s website, any communication with investors, and any scripts used in

connection with communications with investors.

Undeliverable Mail

38.

The Fund Administrator will attempt to locate any Preliminary Claimant whose

email and/or mailing is returned as undeliverable by the U.S. Postal Service or otherwise,

including an advanced address search using commercially available resources, if feasible, and

will document all such efforts. If another address is obtained, the Fund Administrator will then

resend it to the Preliminary Claimant’s new address within twenty-one (21) days of receipt of the

returned mail. If the mailing is returned again, and the Fund Administrator, despite best

practicable efforts, is unable to find a Preliminary Claimant’s correct address, the Fund

Administrator, in its discretion, may deem such Preliminary Claimant an Unresponsive

Preliminary Claimant.

39.

The Fund Administrator, with Commission staff approval, may engage a thirdparty search firm to conduct more rigorous searches for Persons whose mailings are returned as

undeliverable.

40.

Any Preliminary Claimant who relocates or otherwise changes contact

information after receipt of the Plan Notice must promptly communicate any change in address

or contact information to the Fund Administrator.

Procedures to Request Plan Notice

41.

Any Person who does not receive a Plan Notice, as described in paragraph 36, but

who is aware of this Plan (e.g., through other Preliminary Claimants or on www.sec.gov) and

believes they should be included as a Preliminary Claimant should contact the Fund

Administrator within forty-five (45) days from the approval of the Plan to establish that they

should be considered a Preliminary Claimant. Such Person should include with that

communication, documentation sufficient to support their claim that they should be considered a

Preliminary Claimant, as well as contact information (physical address, telephone number, and

email address, if available) for responsive communications. The Fund Administrator will send

the Person a Plan Notice within fifteen (15) days of receiving the Person’s documentation, if the

Fund Administrator determines that the Person should have received a Plan Notice.

Certification Requirement by Preliminary Claimants and Failure to Respond to Plan

Notice

42.

In order to maintain classification as a Preliminary Claimant, the Certification

Form must be signed by the Preliminary Claimant under penalty of perjury under the laws of the

United States and returned to the Fund Administrator by the deadline stated in the Plan Notice.

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The Certification Form must be executed by the Preliminary Claimant, unless the Fund

Administrator accepts such Certification Form from a successor, heir, administrator, or other

Person authorized to act on the Preliminary Claimant’s behalf. Those authorized to act on behalf

of Preliminary Claimants will be eligible to participate in the distribution to the same extent the

original investor would have been eligible under the terms of the Plan.

43.

The Fund Administrator will review all Certification Forms. Each Preliminary

Claimant will have the burden of proof to establish their identity as a Preliminary Claimant, or

his, her, or its successor. The Fund Administrator will have the right to request, and the

Preliminary Claimant will have the burden of providing to the Fund Administrator, any

additional information and/or documentation deemed relevant by the Fund Administrator.

44.

If a Preliminary Claimant fails to return the Certification Form within sixty (60)

days from the initial emailing and/or mailing of the Plan Notice, the Fund Administrator will

make no fewer than two (2) attempts to contact the Preliminary Claimant by mail, telephone or

email, if known to the Fund Administrator. If a Preliminary Claimant fails to respond to the

Fund Administrator’s contact attempts as described in this paragraph, the Fund Administrator, in

its discretion, may remove such Preliminary Claimant from the distribution, deem such

Preliminary Claimant an Unresponsive Preliminary Claimant, and such Preliminary Claimant’s

allocated amount of the Net Available Fair Fund will remain in the Fair Fund.

Dispute Process

45.

Disputes will be limited to Preliminary Claimant’s Recognized Loss calculation.

Within sixty (60) days of the initial emailing and/or mailing Plan Notice, the Fund Administrator

must receive the Certification Form along with a written communication detailing any dispute

and any supporting documentation. The Fund Administrator will investigate the dispute, and

such investigation will include a review of the written dispute as well as any supporting

documentation.

Final Determination Notices

46.

Within one hundred twenty (120) days of the initial emailing and/or mailing of

the Plan Notices, the Fund Administrator will send a Final Determination Notice to (a) any

Preliminary Claimant who timely submitted a written dispute as described in paragraph 45

above, notifying the Preliminary Claimant of its resolution of the dispute; and (b) those

Preliminary Claimants who have not responded to the Plan Notice, as described in paragraph 44

above, notifying the Preliminary Claimant that he, she, or it has been deemed an Unresponsive

Preliminary Claimant, except for those whose Plan Notice were returned as undeliverable.

Distribution Methodology

47.

The Fund Administrator will calculate each Preliminary Claimant’s Recognized

Loss in accordance with the Plan of Allocation. All Preliminary Claimants who are determined

to have a Recognized Loss, and who are not deemed an Excluded Party or an Unresponsive

Preliminary Claimant will be deemed an Eligible Claimant. All Eligible Claimants whose

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distribution amount is equal to or greater than $10.00, as calculated in accordance with the Plan

of Allocation, will be deemed a Payee and receive a Distribution Payment.

Establishment of a Reserve

48.

Before determining the amount of funds available for distribution and calculating

each Payee’s Distribution Payment, the Fund Administrator, in conjunction with the Tax

Administrator, will establish a reserve to pay Administrative Costs and to accommodate any

unexpected expenditures (the “Reserve”).

49.

After all Distribution Payments are made and Administrative Costs paid, any

remaining amounts in the Reserve will become part of the Residual described in paragraph 69

below.

Preparation of the Payment File

50.

Within one hundred fifty (150) days of Commission approval of the Plan, the

Fund Administrator will compile and send to the Commission staff the Payee information,

including the name, address, calculated Recognized Loss, and the amount of the Distribution

Payment for all Payees (the “Payee List”). The Fund Administrator will also provide a

Reasonable Assurances Letter to the Commission staff, representing that the Payee List: (a) was

compiled in accordance with the approved Plan; (b) is accurate as to Payees’ names, addresses,

Recognized Losses and amounts of their Distribution Payment; (c) includes the number of

Payees compensated; (d) the percentage of Recognized Loss being compensated by the

disbursement from the Fair Fund, and if applicable, the total percentage to include all prior

disbursements; (e) the total amount being distributed; and (f) provides all information necessary

to make a payment to each Payee.

The Escrow Account

51.

Prior to the disbursement of funds from the Net Available Fair Fund, the Fund

Administrator will establish an escrow account (the “Escrow Account”) with a United States

commercial bank that is a well-capitalized financial institution as defined by the Federal Reserve

Act, Subpart D, 12 C.F.R. 208.43 and that is not unacceptable to the Commission staff (the

“Bank”), pursuant to an escrow agreement (the “Escrow Agreement”) to be provided by

Commission staff.

52.

The Fund Administrator, pursuant to the Escrow Agreement, shall also establish

with the Bank a separate deposit account (e.g. controlled distribution account, managed

distribution account, linked checking and investment account) (the “Distribution Account”),

insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the guaranteed FDIC pass

through limit. The Distribution Account shall be linked with the Escrow Account and shall be

named, and records maintained, in accordance with the Escrow Agreement.

53. During the term of the Escrow Agreement, the portions of the Fair Fund transferred

to the Escrow Account (the “Escrow Property”) shall be invested and reinvested in short-term

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U.S. Treasury securities backed by the full faith and credit of the United States Government or

an agency thereof. The investment shall be, of a type and term necessary to meet the cash

liquidity requirements for payments to Payees and Administrative Costs, including investment or

reinvestment in a bank account insured by the FDIC up to the guaranteed FDIC limit, or in

money market mutual funds registered under the Investment Company Act of 1940 that invest

100% of their assets in direct obligations of the United States Government.

54. The Fund Administrator shall provide duplicate original bank and/or investment

statements on any accounts established by the Fund Administrator to the Tax Administrator on a

monthly basis and shall assist the Tax Administrator in obtaining mid-cycle statements, as

necessary.

55. The Fund Administrator, in consultation with the Commission staff, shall work

with the Bank on an ongoing basis to deposit or invest funds in the Escrow and Distribution

Accounts so as to result in the maximum reasonable net return, taking into account the safety of

such deposits or investments and tax implications; and to determine an allocation of funds

between the Escrow and Distribution Account.

56.

All interest, dividends, and/or income earned by the Escrow Property will accrue

for the benefit of the Escrow Property. All Administrative Costs associated with the Escrow and

Distribution Accounts will be the responsibility of the Fund Administrator, who may be

reimbursed for said costs as provided in this Plan. No such Administrative Costs may be paid to

the Bank, its agents, and/or its affiliates from the Escrow Property.

Distribution of the Fair Fund

57.

Upon the Commission’s staff’s receipt, review, and acceptance of the Payee List

and Reasonable Assurances Letter from the Fund Administrator, the Commission staff will seek

an order from the Commission pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17

C.F.R. § 210.1101(b)(6), to disburse funds from the Net Available Fair Fund to the Bank in

accordance with the Payee List for distribution by the Fund Administrator in accordance with the

Plan. All disbursements will be made pursuant to a Commission Order.

58.

Upon issuance of an order to disburse, the Commission staff will direct the

transfer of funds in accordance with the Payee List to the Bank. The Fund Administrator will

then use its best efforts to commence mailing Distribution Payment checks and/or effect

electronic payments within ten (10) business days of the release of the funds into the Escrow

Account. All efforts will be coordinated to limit the time between the Escrow Account’s receipt

of the funds and the issuance of Distribution Payments.

59.

All checks will be issued by the Fund Administrator from the Distribution

Account. All checks will bear a stale date of one hundred twenty (120) days from the date of

issuance. Checks that are not negotiated by the stale date will be voided, and the Bank will be

instructed to stop payment on those checks. A Payee’s claim will be extinguished if he, she, or it

fails to negotiate his, her or its check by the stale date, and the funds will remain in the Fair

Fund, except as provided in paragraph 63.

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60.

All Distribution Payments will be preceded or accompanied by a communication

that includes, as appropriate: (a) a statement characterizing the distribution; (b) a statement that

the tax treatment of the distribution is the responsibility of each Payee and that the Payee should

consult his, her or its tax advisor for advice regarding the tax treatment of the distribution; (c) a

statement that checks will be void and cannot be reissued after one hundred twenty (120) days

from the date the original check was issued; and (d) contact information for the Fund

Administrator for questions regarding the Distribution Payment. The letter or other mailings to

Payees characterizing a Distribution Payment will be prepared to the Tax Administrator and

submitted to the Commission staff for review and approval.

61.

All Distribution Payments, either on their face or in the accompanying mailing,

will clearly indicate that the money is being distributed from the Fair Fund established by the

Commission to compensate investors for harm as a result of securities law violations.

Post Distribution; Handing of Returned or Uncashed Checks; and Reissues

62.

The Fund Administrator shall use its best efforts to make use of commercially

available resources and other reasonably appropriate means to locate all Payees whose checks

are returned to the Fund Administrator as “undeliverable.” If new address information becomes

available, the Fund Administrator will repackage the distribution check and send it to the new

address. If new address information is not available after a diligent search (and in no event no

later than ninety (90) days after the initial mailing of the original check) or if the distribution

check is returned again, the check shall be voided and the Fund Administrator shall instruct the

issuing financial institution to stop payment on such check. If the Fund Administrator is unable

to find a Payee’s correct address, the Fund Administrator, in its discretion, may remove such

Payee from the distribution and the allocated Distribution Payment will remain in the Fair Fund

for distribution, if feasible, to the remaining Payees.

63.

The Fund Administrator will reissue checks or electronic payments to Payees

upon the receipt of a valid, written request from the Payee if prior to the initial stale date. In

cases where a Payee is unable to endorse a Distribution Payment check as written (e.g., name

changes, IRA custodian changes, or recipient is deceased) and the Payee or a lawful

representative requests the reissuance of a Distribution Payment check in a different name, the

Fund Administrator will request, and must receive, documentation to support the requested

change. The Fund Administrator will review the documentation to determine the authenticity

and propriety of the change request. If, in the discretion of the Fund Administrator, such change

request is properly documented, the Fund Administrator will issue an appropriately redrawn

Distribution Payment to the requesting party. Reissued checks will be void at the later of one

hundred twenty (120) days from issuance of the original check or thirty (30) days from the

reissuance, and in no event will a check be reissued after one hundred twenty (120) days from

the date of the original issuance without the approval of Commission staff.

64.

The Fund Administrator will work with the Bank and maintain information about

uncashed checks and any returned items due to non-delivery, insufficient addresses, and/or other

deficiencies. The Fund Administrator is responsible for researching and reconciling errors and

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reissuing payments when possible. The Fund Administrator is also responsible for accounting

for all payments. The amount of all uncashed and undelivered payments will continue to be held

in the Fair Fund.

65.

The Fund Administrator will make and document its best efforts to contact Payees

to follow-up on the status of uncashed distribution checks over $100 (other than those returned

as “undeliverable”) and take appropriate action to follow-up on the status of uncashed checks at

the request of Commission staff. The Fund Administrator may reissue such checks, subject to

the time limits detailed herein.

66.

At the discretion of the Fund Administrator, certain costs that were not factored

into the Reserve, such as bank fees for the return of a payment, may reduce the Payee’s

Distribution Payment. In such situations, the Fund Administrator will immediately notify the

Tax Administrator of the reduction in the Distribution Payment.

Receipt of Additional Funds

67.

Should any additional funds be received pursuant to Commission or Court order,

agreement, or otherwise, prior to the Commission’s termination of the Fair Fund, such funds will

be added to the Fair Fund and distributed, if feasible, in accordance with the Plan, pursuant to the

Commission’s Rules.

Disposition of Undistributed Funds

68.

If funds remain following the initial distribution and payment of all

Administrative Costs, the Fund Administrator, in consultation with the Commission staff, may

seek subsequent distribution(s) of any available remaining funds, pursuant to the Commission’s

Rules. All subsequent distributions shall be made in a manner that is consistent with this Plan.

69.

A residual within the Fair Fund will be established for any amounts remaining

after the final disbursement to Payees from the Fair Fund and the payment of all Administrative

Costs (the “Residual”). The Residual may include funds from, among other things, amounts

remaining in the Reserve, distribution checks that have not been cashed, checks or electronic

payments that were not delivered or were returned to the Commission, and tax refunds for

overpayment of taxes or for waiver of IRS penalties.

70.

All funds remaining in the Residual that are infeasible to distribute to investors

will be returned to the Commission and transferred to the U.S. Treasury, subject to Section

21F(g)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), after the final

accounting is approved by the Commission. Returning such money to the Respondent would be

inconsistent with the equitable principle that no Person should profit from his wrongdoing.

Therefore, in these circumstances distributing disgorged funds to the U.S. Treasury is the most

equitable alternative.

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Administrative Costs

71.

All Administrative Costs will be paid from the Fair Fund in accordance with the

Commission’s Rules.

Accountings

72.

In accordance with Rule 1105(f) of the Commission’s Rules, during the first ten

(10) days of each calendar quarter after funds have been transferred to the Bank, the Fund

Administrator will file with the Commission, on a standardized accounting form provided by the

Commission staff, an accounting of all monies earned or received and all monies spent in

connection with the administration of the Plan.

73.

Upon completion of all distributions to Payees pursuant to the procedures

described above, the Fund Administrator shall arrange for the payment of all Administrative

Costs, transfer all remaining funds to the Commission, and submit a final accounting for

approval by the Commission on a standardized form provided by the Commission staff. The

Fund Administrator will also submit a report to the Commission staff containing the final

distribution statistics regarding distributions to individuals and entities, and such other

information requested by the Commission staff.

Wind-down and Document Retention

74.

The Fund Administrator will shut down the website, P.O. Box and customer

service telephone line(s) established specifically for the administration of the Fair Fund six (6)

months after the transfer of any remaining funds to the Commission, or at such earlier time as the

Fund Administrator determines with the concurrence of the Commission staff.

75.

The Fund Administrator will retain all materials submitted by Preliminary

Claimants in either paper or electronic form for a period of six (6) years from the date of

approval of a final fund accounting. Materials maintained in electronic form must be accessible

and readable for the duration of retention. Pursuant to the Commission staff's direction, the Fund

Administrator will either turn over to the Commission or destroy all materials, including

documents in any media, upon expiration of this period.

Termination of the Fair Fund

76.

The Fair Fund will be eligible for termination and the Fund Administrator will be

eligible for discharge after all of the following have occurred (a) a final accounting, in a standard

accounting format provided by the Commission staff, has been submitted by the Fund

Administrator and approved by the Commission; (b) all Administrative Costs have been paid;

and (c) any amount remaining in the Fair Fund has been returned to the Commission for transfer

to U.S. Treasury. Once the Commission has approved the final accounting, the Commission

staff will seek an order from the Commission authorizing: (a) the transfer of the Residual that is

infeasible to return to investors, and any amounts returned to the Fair Fund in the future that is

infeasible to return to investors, to the general fund of the U.S. Treasury, subject to Section

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21F(g)(3) of the Exchange Act; (b) discharge of the Fund Administrator; (c) cancellation of the

Fund Administrator’s bond; and (d) termination of the Fair Fund.

VII.

NOTICE OF PROPOSED PLAN AND OPPORTUNITY FOR COMMENT

77.

The Notice of the Proposed Plan of Distribution and Opportunity for Comment

(the “Notice”) shall be published on the Commission’s website

http://www.sec.gov/litigation/fairfundlist.htm. Any Person wishing to comment on the Plan

must do so in writing by submitting their comments within thirty (30) days of the date of the

Notice (a) to the Office of the Secretary, United States Securities and Exchange Commission,

100 F Street, N.E., Washington, D.C. 20549-1090; (b) by using the Commission’s Internet

comment form (www.sec.gov/litigation/admin.shtml); or (c) by sending an e-mail to rulecomments@sec.gov. Comments submitted by e-mail or via the Commission’s website should

include “Administrative Proceeding File No. 3-17673 in the subject line. Comments received

will be publicly available. Persons should only submit comments that they wish to make

publicly available.

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Exhibit A

PLAN OF ALLOCATION

This Plan of Allocation 1 is designed to compensate investors based on their losses

associated with the purchase of binary options through EZTD's two online trading platforms,

eztrader.com and globaloption.com (the “Securities”), from June 1, 2011 through August 31,

2014 (the “Relevant Period”). Investors who did not purchase the Securities during the Relevant

Period and did not suffer a loss as the result of the Respondent’s violative conduct are ineligible

to recover under this Plan. Based upon documents obtained by the Commission during its

investigation, including account-level transactional records, the Fund Administrator has

identified those investors, or their lawful successors, who may have suffered losses due to the

Respondent’s offering of the Securities (the “Preliminary Claimants”).

For each Preliminary Claimant, the Recognized Loss will be calculated as follows:

$0.00.

A.

For each account, calculate the sum of the deposits made into the Preliminary

Claimant’s account during the Relevant Period (“Deposit Amount”);

B.

For each account, calculate the sum of the withdrawals made from the

Preliminary Claimant’s account during the Relevant Period (“Withdrawal

Amount”);

C.

For each account, subtract the Withdrawal Amount from the Deposit Amount

(“Account Losses”);

D.

Calculate each Preliminary Claimant’s Recognized Loss as the sum of the

Account Losses across all of the Preliminary Claimant’s accounts.

If the Recognized Loss is negative, reflecting a gain, then the Recognized Loss will be

To avoid payment of a windfall, the Recognized Loss will be reduced by the amount of

any compensation for the loss that resulted from the conduct described in the Order that was

received from another source (e.g., class action settlement), to the extent known by the Fund

Administrator. In the event of a subsequent distribution, the Distribution Payment from any

previous distribution made under this Plan will be treated as prior compensation, reducing the

Recognized Loss.

Any Preliminary Claimant who suffered a Recognized Loss pursuant to this Plan of

Allocation, and who is not an Excluded Party or an Unresponsive Preliminary Claimant, as

defined in the Plan, will be deemed an Eligible Claimant.

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All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.

Additional Provisions

Allocation of Funds: As the Net Available Fair Fund is less than the sum of the

Recognized Losses of all Eligible Claimants, each Eligible Claimant’s distribution amount will

equal his, her or its “Pro Rata Share” of the Net Available Fair Fund, subject to the “Minimum

Distribution Amount.”

Pro Rata Share: A Pro Rata Share computation is intended to measure Eligible Claimants’

Recognized Losses against one another. The Fund Administrator shall determine each Eligible

Claimant’s Pro Rata Share as the ratio of his, her, or its Recognized Loss to the sum of Recognized

Losses of all Eligible Claimants.

Minimum Distribution Amount: The Minimum Distribution Amount will be $10.00. If

an Eligible Claimant’s distribution amount is less than the Minimum Distribution Amount, that

Eligible Claimant will be deemed ineligible to receive a Distribution Payment and his, her, or its

distribution amount will be reallocated on a pro-rata basis to Eligible Claimants whose

distribution amounts are greater than or equal to the Minimum Distribution Amount.

Payee: An Eligible Claimant whose distribution amount equals or exceeds the Minimum

Distribution Amount will be deemed a Payee.

Distribution Payment: Each Payee will receive a Distribution Payment equal to his, her,

or its distribution amount. In no event will a Payee receive from the Fair Fund more than his,

her, or its Recognized Loss.

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