OSC fines, bans binary options enabler

By James Langton | May 26, 2021 | Last updated on May 26, 2021
1 min read
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The owner of a couple of offshore firms that processed payments for binary options trading firms has been fined and banned in a settlement with the Ontario Securities Commission (OSC).

A regulatory hearing panel approved a settlement with David Cartu, a resident of Israel, who controlled a pair of now-defunct firms, Greymountain Ltd. and UKTVM Ltd., which allegedly processed payments for firms that traded binary options with investors in Ontario.

According to the settlement, the unregistered binary options trading “resulted in investor losses and violated [securities rules],” and it said the services provided by Cartu’s companies to those firms “constituted acts in furtherance of trading in securities,” which also represents a violation.

The companies stopped providing these payment services two days before the Canadian Securities Administrators proposed banning the advertising and sale of binary options in Canada, the settlement said, and Greymountain subsequently went into liquidation.

Under the settlement, Cartu is banned for seven years, and ordered to pay a $300,000 penalty and $15,000 in costs.

The settlement also noted that, while his firms violated securities rules, “There is no evidence that Cartu received amounts from, had contact with, initiated or solicited any Ontario investor to purchase binary options, or that he engaged in acts of dishonesty with respect to Ontario investors.”

It also said that, after Greymountain went into liquidation in 2017, “Cartu and Greymountain employees assisted the liquidator in recovering funds from merchants for investors.”

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.