More than 10 months have passed since the United States Commodity Futures Trading Commission (CFTC) launched an action against a large-scale binary options scheme, involving brands like BeeOptions, Glenridge Capital, and Rumelia Capital.
According to the latest documents filed at the Texas Western District Court, the CFTC is having hard time serving the complaint on most of the defendants in this case. The regulator is seeking to use alternative means of service.
Specifically, the CFTC Motion relates to defendant individuals David Cartu, Jonathan Cartu, Joshua Cartu, Leeav Peretz, and Nati Peretz, and defendant organizations Blue Moon Investments, Ltd. and Orlando Union, Inc. At all relevant times, the Foreign Defendants have been located outside of the United States and, despite diligent efforts, the CFTC has been unable to effect service upon them.
Now, the CFTC seeks the Court’s authorization to serve the Foreign Defendants by:
sending the Summons and Complaint via ordinary mail, no signature required, to each Defendant’s last known address;
sending the Summons and Complaint by email to accounts used by the individual defendants in connection with the fraudulent conduct at issue and to last known email accounts used by the individual defendants; and
publishing a notice in the Times of Israel and the Toronto Star, advising the Foreign Defendants of this matter and providing a link to the Complaint.
Let’s recall that the action names 10 defendants – six individuals and four companies. They are charged with operating a fraudulent binary options trading scheme that received over $165 million in connection with illegal, off-exchange binary option transactions on currency pairs, oil, and other commodities.
The complaint charges that from at least May 1, 2013 through April 29, 2018, three Canadian brothers—defendants David Cartu, Jonathan Cartu, and Joshua Cartu—marketed, offered, and sold illegal, off-exchange binary options to retail customers on websites under the BeeOptions, Glenridge Capital, and Rumelia Capital binary option brands.
The CFTC complaint alleges that, beginning on or before September 26, 2015, the binary option transactions offered by BeeOptions, Glenridge Capital, and Rumelia Capital were executed on an internet-based trading platform developed and operated by the Cartu brothers and Masten. As alleged in the complaint, customers of the Cartu brands, and later customers of other binary options brands operated by third-parties, accessed the Cartu platform through each individual binary brand’s website.
The complaint charges that the Cartu brothers and Masten, acting through the defendant entities, controlled these transactions and manipulated the results of some trades to force customer losses and generate profits for themselves.
As alleged in the complaint, the Cartu brothers also operated Greymountain Management Limited, a now-defunct “payment processor” that maintained its principal place of business in Ireland. The Cartu brothers used Greymountain to facilitate the transfer of funds from customers in the U.S. and elsewhere for illegal, off-exchange binary option transactions.
Through Greymountain and other related entities, the Cartu brothers processed over $165 million in credit card payments for binary option transactions. The complaint further alleges that Masten and SignalPush provided trade signals and auto-trader services to customers, and failed to register with the CFTC as required.
In its continuing litigation against the defendants, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution for the benefit of customers, permanent registration and trading bans, and a permanent injunction from future violations of the Commodity Exchange Act.