Business Irish

Monday 27 May 2019

Investors claim they lost millions in electronic trading scam, take action against Irish firm and Israeli brothers

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Aodhan O'Faolain

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

They have sued Greymountain Management, which is currently in liquidation, and who the High Court heard are its four directors - Israel-based brothers Jonathan and David Cartu, 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 pay-off 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 on whether the price of a particular asset will rise above or fall below a specified amount at a specified date and time.

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

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

 It is claimed Mr Grainger, of Charlemont, Griffith Avenue, Dublin 9, and Mr Coates, of Hogan Square, Hogan Place, Dublin 2, operated and managed Greymountain for the purpose of the alleged scam, and acted as agents for the Cartu brothers, who the plaintiffs allege were shadow directors of the company.

In their action, the investors seek damages for deceit, breach of contract, breach of duty misrepresentation and conspiracy to defraud the plaintiffs.

Greymountain Management was previously the subject of regulatory and revenue investigations, leading to a liquidator being appointed to the company in 2017. The liquidator did not object or consent to the investors' application.

Irish Independent

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