SEC Charges Owner of Options Trading Website for Defrauding Retail Investors
Litigation Release No. 24364 / December 3, 2018
Securities and Exchange Commission v. Mark Suleymanov, No. 2:18-cv-06854 (E.D.N.Y. filed December 3, 2018)
The Securities and Exchange Commission today charged Mark Suleymanov of Glen Cove, New York with engaging in an online binary options scheme that defrauded retail investors out of approximately $4 million.
The SEC's complaint alleges that from at least 2012 to 2016, Suleymanov engaged in the unregistered offer and sale of binary options, which are securities that pay out depending on the outcome of a "yes/no" proposition, such as whether a specific equity security will close at or above a specified price on a given trading day. Suleymanov promoted and sold the options on the SpotFN website and other related websites he controlled, and misrepresented the profitability of investing in the binary options, as well as investors' ability to access their funds. Suleymanov allegedly used software to manipulate investors' trading results to increase investor losses, and prevented many investors from withdrawing their funds. As alleged in the complaint, the SpotFN website also falsely stated that an investor's funds would be held in a separate account and used only for trading options, not for SpotFN's business expenses. In fact, Suleymanov commingled investor funds in his bank accounts and misused certain of the funds for business and personal expenses.
The SEC's complaint charges Suleymanov with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as the registration provisions of Section 5 of the Securities Act. The complaint seeks a permanent injunction, disgorgement plus prejudgment interest, and a penalty. Suleymanov has agreed to a bifurcated settlement where he will be permanently enjoined from these provisions. The settlement, which is subject to Court approval, reserves the issues of disgorgement, prejudgment interest and a civil penalty for further determination by the court upon motion of the SEC.
The SEC's investigation was conducted by Natalie Shioji and supervised by Lisa Deitch, Cheryl Crumpton, and Antonia Chion. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York, the Federal Bureau of Investigation, and the Missouri Secretary of State's Office.