About six months after the United States Securities and Exchange Commission (SEC) launched an action against Spot Option and its owners Malhaz Pinhas Patarkazishvili (Pini Peter) and Ran Amiran, the regulator is seeking an entry of default against the defendants.
This becomes clear from documents filed with the Nevada District Court on October 15, 2021 and seen by FX News Group.
The case concerns a multi-million dollar fraudulent scheme involving unregistered offers and sales of security-based “binary options” to retail investors in the United States from at least April 2012 through August 2017. The scheme was overseen by Pini Peter and Ran Amiran through a company they owned and controlled called Spot Option, Ltd. (“Spot Option”) now known as Spot Option Tech House, Ltd.
Through deceptive and fraudulent acts, Spot Option sought and reached thousands of investors in the United States, including retirees, who traded through its platform. Many of those investors lost most of their money including, in some cases, hundreds of thousands of dollars meant for retirement. Spot Option and its Partners, on the other hand, raked in millions in profits, the regulator says.
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.
According to the motion for entry of default, Pini Peter and Spot Option have failed to answer, plead, or otherwise respond to the SEC’s Complaint.
Based on service having been completed via U.S.-based counsel no later than June 18, 2021, the answers or other responses of Defendants Pinhas Peter and Spot Option were due under Fed. R. Civ. P. 12(a)(1)(A)(i) on July 9, 2021. As of this date, neither the Court nor the SEC has received an answer or other Rule 12 response by these defendants to the Complaint.
Let’s note that the clerk’s entry of default is usually followed by a default judgment, which stipulates the penalties, such as fines and disgorgement.