SEC’s action against binary options marketer may be dismissed
The Massachusetts District Court warns it may dismiss the action targeting binary options marketer who caused 25,000 investors to make deposits with unregistered firms.
Nearly four months have passed since the United States Securities and Exchange Commission (SC) launched an action 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. Procedural formalities, however, may lead to the case getting closed.
On January 13, 2020, the Massachusetts District Court issued a notice warning that it may dismiss the case. The document, seen by FinanceFeeds, notes that the SEC’s action was filed on September 27, 2019. To date, however, there has been no return to the Court of proof of service of the summons and complaint as required by the Federal Rules of Civil Procedure.
Accordingly, the SEC’s action will be dismissed without prejudice in fourteen (14) days from the date of the Order unless a proof of service is filed or good cause shown why service has not been made.
Let’s note that another US regulator – the Commodity Futures Trading Commission (CFTC), has also launched an action against Szatmari. The CFTC has admitted that it is unable to contact the defendant via traditional means so the Hawaii District Court issued an order authorizing the regulator to serve Peter Szatmari by publishing notice in the Hawaii Star Advisor.
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.
