Investors claim they lost millions in electronic-trading scam

A group of Investors who claim they lost millions of euro in an electronic-trading scam have brought a High Court damages action against an Irish registered firm and Irish and Israeli-based directors.

They have sued Greymountain Management Ltd, which is in liquidation, and who the High Court heard are its four directors, Israel-based brothers Jonathan and David, and the firm’s Dublin based directors Ryan Coates and Liam Grainger.

The investors claim they believed they were investing in a complex trade known as binary options, when in fact the software system their trades were conducted on was rigged to ensure they lost their money.

Also known as “all or nothing options”, binary options are a product where the investor gets either a payoff of some fixed monetary amount if successful, or nothing at all from their investment.

The outcome of the investment depends entirely on the outcome of a yes/no proposition.

The yes/no proposition depends the price of a particular asset will rise above or fall below a specified amount at a specified date and time.

High risk

Binary options are banned in most jurisdictions due to the high risk involved and fraud.

In what is understood to be one of the first cases of its type the investors also claim they lost in total approximately €4.1 million from investing in binary options either indirectly, or through third parties directly with Greymountain Management, which it is claimed provided services to binary options providers.

The investors, who come from the US, Canada, Singapore, UAE and the UK claim they were induced by the defendants to open binary accounts with false claims they would earn significant profits.

The investors made payments to Greymountain, which it is alleged played a pivotal role in the scheme.

Instead of acting honestly it is alleged the defendants conspired to defraud them.

It is claimed the defendants misrepresented the location, qualification and identity of brokers and advisers with whom the investors interacted.

The investors, it is alleged, were told the brokers and advisers would act in their interests, generate profits for the investors and earn commissions on profits earned from their investments.

The brokers and adviser’s objectives, it is claimed, was to cause harm to the investors.

Rigged

They claim the software systems upon which the trades were conducted and executed were not legitimate and transparent and were rigged to ensure the investors lost their money.

The defendants also refused to allow them withdraw their money and cancelled withdrawal instructions from the plaintiffs, it is claimed.

It is also claimed the investors were directed to a website operated by the defendant that contained false testimonials and bogus descriptions of historical returns.

It is alleged the directors used Greymountain as a device to facilitate the binary options trading scam.