SEC urges Court not to dismiss action against binary options marketer

Maria Nikolova

The US regulator argues that it has made efforts to effect service on Peter Szatmari and that it awaits information from the Central Authority of Hungary as to whether service has been attempted.

The United States Securities and Exchange Commission (SEC) has reacted swiftly to the issuance of a conditional order to dismiss its case against Peter Szatmari, who created and disseminated false and misleading Internet-based promotional materials designed to drive viewers of binary options brokers’ websites and induce them to open and fund binary option trading accounts.

On January 14, 2020, the SEC submitted its response to the order at the Massachusetts District Court arguing that it would not be appropriate to dismiss the case.

In the document, seen by FinanceFeeds, the Commission explains that it has made efforts to serve Szatmari as an individual in a foreign country. The Commission notes that it sent a letter dated November 8, 2019, requesting that the Central Authority for Hungary undertake to effect service of the Complaint and Summons upon the defendant in accordance with the Hague Convention.

Although no communication has been received back from the Central Authority of Hungary as to whether service has been made or attempted by the Central Authority, the SEC is hopeful that service will at least be attempted within three months of its November letter. However, there has been no particular information otherwise to accurately estimate when the Central Authority will in fact act on the Commission’s letter requesting to effect service. Accordingly, the SEC asks the Conditional Order of Dismissal to be dismissed, stricken, or otherwise rendered a nullity.

According to the SEC’s complaint, between 2014 and 2016, Szatmari participated in the creation and dissemination of at least six false and misleading marketing campaigns designed to persuade potential investors, predominately in the United States, to open and fund binary options trading accounts with overseas unregistered brokers operating on the Internet. These campaigns’ advertising materials generally consisted of (a) textual materials disseminated over the Internet; (b) a website; and (c) one or more videos embedded into the website.

The misleading websites and videos were viewed by more than 350,000 persons and caused more than 25,000 investors to make deposits for trading binary options with one of approximately 35 unregistered brokers. These unregistered brokers offered and sold binary options referencing securities over the Internet to investors in the United States.

The SEC estimates that Szatmari and his partner David Sechovicz realized approximately $3.8 million in profits from the six campaigns launched between 2014 and 2016. They also disseminated false and misleading binary marketing campaigns create by other affiliate marketers. The duo realized approximately $1.66 million in additional profits through remarketing.

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