Court allows SEC to use alternative service on Spot Option, Pini Peter
The Nevada District Court has permitted the United States Securities and Exchange Commission (SEC) to use alternative service on Israel-based defendants in a binary options fraud case.
An order signed by Magistrate Judge Daniel J. Albregts on June 11, 2021, grants the SEC’s Motion for Alternative Service of Process.
As FX News Group has reported, the SEC filed its complaint against the defendants on April 16, 2021, alleging that Pini Peter and Amiran owned Spot Tech, through which they fraudulently sold “binary option” securities.
The SEC obtained addresses for the defendants through the Israel Population and Immigration Authority and the Israel Corporations Authority, both government-maintained databases. The SEC has sought an order from the Court allowing it to serve Defendants by Federal Express to these addresses.
In its complaint, the SEC alleges that defendants Malhaz Pinhas Patarkazishvili (“Pini Peter”) and Ran Amiran owned and controlled a company called Spot Option, Ltd, now known as Spot Tech House, Ltd, and that through Spot Option, the defendants carried out a scheme that involved the fraudulent and unregistered offer and sale of “binary option” securities to retail investors worldwide, including in the United States.
Spot Option, with the close involvement of Pini Peter and Amiran, deployed a multitude of fraudulent practices, deceptive acts, and false and misleading statements to cause investors to lose money trading the options offered by Spot Option. Defendants’ activities resulted in many investors losing most of their money trading these “binary options,” including oftentimes hundreds of thousands of dollars meant for retirement.
The SEC accuses Spot Option of violation of the registration provisions of Section 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and 77e(c)], the antifraud provisions of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], and the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b‒5].
The Complaint says that Defendants Pini Peter and Amiran are liable for violations of Section 5 of the Securities Act because they each played a substantial role in Spot Option’s offers and sales of binary options. Pini Peter and Amiran are also allegedly liable for Spot Option’s violations of the Exchange Act because they are controlling persons of Spot Option as defined by the Exchange Act.
The SEC seeks disgorgement of Defendants’ ill-gotten gains, prejudgment interest, civil monetary penalties, an injunction against further violations of the federal securities laws as to all Defendants, a specific conduct based injunction as to the individual defendants, and other appropriate relief.