SEC charges Spot Option for $100 million scam on US investors
Spot Option allegedly instructed its partners to permit investors to withdraw only a portion of the monies the investors deposited, devised a manipulative payout structure for binary options trades, and designed its trading platform to increase the probability that investors’ trades would expire worthless. The defendants allegedly made millions of dollars as a result.
Malhaz Pinhas Patarkazishvili (also known as Pini Peter) and Ran Amiran, former top executives of Israeli-based Spot Tech House Ltd (formerly known as Spot Option Ltd.) have been charged by the SEC with deceiving U.S. investors out of more than $100 million through fraudulent and unregistered online sales of risky securities known as binary options.
Spot Option has allegedly defrauded retail investors worldwide through a scheme involving the sale of online binary options, which included a proprietary trading platform with which developed white label partnerships.
According to the complaint, Spot Option instructed its white label partners to aggressively market the binary options as a highly profitable investments for retail investors, but investors were unaware the defendants’ white label partners were the counter-parties on all investor trades, which meant they profited when the investors lost money.
Spot Option allegedly instructed its partners to permit investors to withdraw only a portion of the monies the investors deposited, devised a manipulative payout structure for binary options trades, and designed its trading platform to increase the probability that investors’ trades would expire worthless. The defendants allegedly made millions of dollars as a result.
Melissa R. Hodgman, Acting Director of the SEC’s Division of Enforcement, commented: “Through our action against Spot Option and its executives, which follows a series of actions against others who allegedly used Spot Option’s binary option platform to victimize investors, we demonstrate our commitment to holding those at the top accountable. As these binary options cases show, investors should be on their guard whenever they see high-pressure sales tactics and too-good-to-be-true promises of returns or performance.”
Jennifer S. Leete, Associate Director in the SEC’s Enforcement Division, said: “Spot Option’s trading platform allegedly supported a worldwide binary options fraud. This action shows that the SEC will work with its foreign regulatory partners to pursue international actors who defraud U.S. investors.”
The complaint seeks disgorgement of ill-gotten gains, prejudgment interest, financial penalties, and permanent injunctions against all three defendants.
